QUIZLET Francisco owns a beach house condo that he rents. The following information is available: Personal use days 10 days Used

Question

3 years ago

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QUIZLET Francisco owns a beach house condo that he rents. The following information is available: Personal use days 10 days Used

by relatives 90 days Rental days 200 days Rental income $40,000 Expenses: Association condo fees $24,000 Utilities: Taxes $12,000 Interest on acquisition loan: $600,000 at 3% interest only $18,000 (this is the only debt of the taxpayer) Management fee for rentals $15,000 Depreciation $4,000 What kind of activity is this for tax purposes? Question 39 options: Vacation home. Personal residence Rental property Mixed use property

Business

1 answer:

uranmaximum [27] · Answer 1 · 2021-12-10T02:55:45+03:00

Answer:

rental property

Explanation:

Basically if you rent a property for 15 days or more per year you must include any revenue generated as rental income, and the property is classified as rental property. In this case, Francisco rented this beach house for 200 days during the past year and received $40,000 in rental income. Since his personal use of the house was 14 days or less (only 10 days), he will be able to deduct related expenses.