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Diana made significant decisions such as approving new tenants while a
local management company handled the day-to-day needs. The Diego
family used it for 30 days for a personal vacation during the year. Other
expenses for the year for this vacation home (excluding interest and
taxes mentioned above) were: $700 for real estate management fees paid
to a local agent who handles the rental of the property, insurance
expense $2,200, repairs expense $500, and utilities expense $1,800.
Their depreciation expense for the rental use of this property for the year
is $1,455. They use the IRS formula for allocating interest and taxes.
The Diego family contributed $3,000 cash to their church and they have
the necessary documentation for this contribution.
Jordan had the following employment-related expenses that were not
reimbursed by his employer:
1. Jordan drove his BMW (which he purchased four years ago on
November 18) a total of 12,000 miles during the year. He drove
4,800 miles while conducting business during the first half of the
year. In July, the firm purchased several hybrid autos that the
architects were then required to use for all business travel rather
than their personal autos. These autos were kept at the firm's
offices. Jordan used his personal auto for the three-mile commute
to his office, a total of 1,500 miles for the entire year.
2. Jordan attended work-related conference in Los Angeles. He paid a
registration fee of $400 and incurred costs of $450 for
transportation, $625 for lodging, and $260 for meals. He was not
reimbursed for these expenses.
In August, Diana quit her job and began a consulting business. The
business code is 541990. She is operating the business under her own
name and rented a small office at 1234 Coral Way, Coral Gables, FL
33146. Since Diana began her business so late in the year, her consulting
income was only $8,000. She incurred the following expenses: $475
supplies, $210 telephone, $3,200 office rent, and $325 advertising. In
addition, Diana drove her two-year old Lexus on business 750 miles to
visit prospective and current clients. This car was also driven 7,000