Mackensie owns a condominium in the Rocky Mountains.During the year,Mackensie uses the condo a total of 23 days.The condo is also rented to tourists for a total of 77 days and generates rental income of $10,900.Mackensie incurs the following expenses in the condo: Using the court's method of allocating expenses,the amount of depreciation that Mackensie may take with respect to the rental property will be
A)$0.
B)$1,044.
C)$5,796.
D)$11,000

Question

Mackensie owns a condominium in the Rocky Mountains.During the year,Mackensie uses the condo a total of 23 days.The condo is also rented to tourists for a total of 77 days and generates rental income of $10,900.Mackensie incurs the following expenses in the condo:  Using the court's method of allocating expenses,the amount of depreciation that Mackensie may take with respect to the rental property will be
A)$0. 
B)$1,044. 
C)$5,796. 
D)$11,000

Quizplus · Accepted Answer

C)
 11ea7cb8_549c_f2e7_928c_f11821486af7_TB1258_00 The taxpayer's use exceeds 10% of the rental days so the property is limited by the vacation home rules.Note that the potential depreciation deduction is 77/100 × $11,000 = $8,470,but it is limited to the remaining income after taking all other deductions into account.

Mackensie Owns a Condominium in the Rocky Mountains