Ola owns a cottage at the beach. She and her family use the property for 30 days during the summer season and rent it to unrelated parties for 60 days. The rental receipts amount to $8,000. Total costs of operating the property are as follows:
$$\begin{array} { | l | r | }
\hline \text { Mortgage interest } & \$ 13,000 \
\hline \text { Property taxes } & 5,000 \
\hline \text { Utilities } & 2,000 \
\hline \text { Insurance } & 1,000 \
\hline \text { Maintenance } & 600 \
\hline
\end{array}$$ In addition, potential depreciation expense is $9,000.
a. Is the cottage subject to the vacation home rental limitations of IRC Sec. 280A?
b. How much of expenses can Ola deduct?

Question

Ola owns a cottage at the beach. She and her family use the property for 30 days during the summer season and rent it to unrelated parties for 60 days. The rental receipts amount to $8,000. Total costs of operating the property are as follows:
 $$\begin{array} { | l | r | } 
\hline \text { Mortgage interest } & \$ 13,000 \
\hline \text { Property taxes } & 5,000 \
\hline \text { Utilities } & 2,000 \
\hline \text { Insurance } & 1,000 \
\hline \text { Maintenance } & 600 \
\hline
\end{array}$$ In addition, potential depreciation expense is $9,000.
a. Is the cottage subject to the vacation home rental limitations of IRC Sec. 280A?
b. How much of expenses can Ola deduct?

Quizplus · Accepted Answer

The Answer of Ola owns a cottage at the beach. She and her family use the property for 30 days during the summer season and rent it to unrelated parties for 60 days. The rental receipts amount to $8,000. Total costs of operating the property are as follows:
 $$\begin{array} { | l | r | } 
\hline \text { Mortgage interest } & \$ 13,000 \
\hline \text { Property taxes } & 5,000 \
\hline \text { Utilities } & 2,000 \
\hline \text { Insurance } & 1,000 \
\hline \text { Maintenance } & 600 \
\hline
\end{array}$$ In addition, potential depreciation expense is $9,000.
a. Is the cottage subject to the vacation home rental limitations of IRC Sec. 280A?
b. How much of expenses can Ola deduct?

Ola Owns a Cottage at the Beach In Addition, Potential Depreciation Expense Is $9,000