Nathan owns a tri-plex in Santa Maria,California.He lives in one and rents the other two remaining units.All three units are identical.He incurred the following expenses for the entire building: How much in rental expenses can Nathan deduct against the rental income on a Schedule E in the current year (without considering any passive loss limitations)? (Round your answers to the nearest whole dollar)

Question

Nathan owns a tri-plex in Santa Maria,California.He lives in one and rents the other two remaining units.All three units are identical.He incurred the following expenses for the entire building:  How much in rental expenses can Nathan deduct against the rental income on a Schedule E in the current year (without considering any passive loss limitations)? (Round your answers to the nearest whole dollar)

Quizplus · Accepted Answer

To calculate the rental expenses that Nathan can deduct against the rental income, we need to add up the total expenses for the entire building and then allocate them based on the number of units. 
Total expenses = $106,000 + $5,400 + $6,000 + $4,800 + $4,800 + $4,800 + $5,500 + $6,000 + $5,000 + $4,200 + $4,000 + $4,800 = $155,100
Number of units = 3
Allocated expenses per unit = $155,100 / 3 = $51,700
Since Nathan rented out two units, his rental expenses would be the allocated expenses per unit for the two rented units, which is $51,700 x 2 = $103,400.
Therefore, Nathan can deduct $103,400 in rental expenses against his rental income on a Schedule E in the current year. However, this calculation does not consider any passive loss limitations.

Nathan Owns a Tri-Plex in Santa Maria,California