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37. Matt and Marie own a vacation home at the beach. During the
year, they rented the house for 42 days (6 weeks) at $890 per week
and used it for personal use for 58 days. The total costs of
maintaining the home are as follows:
Mortgage interest $4,200
Property taxes 700
Insurance 1,200
Utilities 3,200
Repairs 1,900
Depreciation 5,500
a. What is the proper tax treatment of this information on their
tax return using the Tax Court
method?
b. Is there an option for how to allocate the expense between
personal and rental use? Explain
c. What is the proper tax treatment if Matt and Marie rented the
house for only 14 days?
8. Janet owns a condominium at the beach. She incurs the
following expenses:
Mortgage interest $1,300
Property taxes 800
Insurance 1,500
Utilities 1,800
Repairs 300
Depreciation 4,000