12.( TCO 10) Bob and April own a house at the beach. The house was rented to unrelated parties for 8 weeks during the year. April and the children used the house 12 days for their vacation during the year. After properly dividing the expenses between rental and personal use, it was determined that a loss was incurred as follows: Gross rental income
$ 4,000 Less: Mortgage interest and property taxes $ 3,500
Other allocated expenses 2,000( 5,500) Net rental loss
($ 1,500)
What is the correct treatment of the rental income and expenses on Bob and April ' s joint income tax return for the current year, assuming the IRS approach is used, if applicable? 13.( TCO 10) On May 2, 2010, Karen places in service a new sports utility vehicle that costs $ 70,000 and has a gross vehicle weight of 6,300 lbs. The vehicle is used 40 % for business and 60 % for personal use. Determine the cost recovery deduction for 2010
14.( TCO 10) Danielle owns a vacation cottage. During the current year, she rented it for $ 1,500 for 48 days, and lived in it for 12 days. How would any expenses be accounted for? 15.( TCO 3) Norm ' s car, which he uses 100 % for personal purposes, was completely destroyed in an accident. The car ' s adjusted basis at the time of the accident was $ 13,000. Its fair market value was $ 11,500. The car was covered by a $ 2,000 deductible insurance policy. Norm did NOT file a claim against the insurance policy because of a fear that reporting the accident would result in a substantial increase in his insurance rates. His adjusted gross income