Answer and Explanation:
Natalie's Gross Income = $10,000
75 + 35 = 110 days
Expenses:
Insurance Expense (75/110) x 1000 682
Advertising Expense 500
Mortgage Interest (75/110) x 3500 2386
Property Taxes (75/110) x 900 614
Repairs and Maintenance (75/110) x 650 443
Utilities (75/110) x 950 648
Depreciation (75/110) x 8500 5795
Until the depreciation expenses the total expenses accumulate to 5273. If we deduct that with the gross income total we get 4727. We can only deduct 4727 from the total portion of 5795 depreciation expense.
Therefore, for AGI deductions we take total of (5273 + 4727) = $10,000
For Natalie's personal deduction of AGI
Mortgage interest (35/110) x 3500 1114
Property taxes (35/110) x 900 286
Total personal deduction for AGI $1400
