An individual purchased a warehouse as an investment property two years ago. During the current year, he received rents of $8,000 and paid the following expenses; interest of $6,000, property taxes of $2,000, heat, light and power of $500, and maintenance of $300. The UCC of this Class 1 asset was $60,000 on January 1 of the current year. He cannot claim a rental loss in the current year.

Question

Quizplus · Accepted Answer

It is not clear from the information provided whether or not the individual can claim a rental loss in the current year. The rental income of $8,000 is less than the total expenses of $8,800, which would indicate a rental loss of $800. However, the UCC of the asset is not relevant to the determination of whether or not a rental loss can be claimed. Additionally, more information is needed about the individual's other sources of income and their overall tax situation to determine if a rental loss can be claimed.

An Individual Purchased a Warehouse as an Investment Property Two