Question

In the current year, Marnie rented her vacation home for 75 days, used it for personal reasons for 22 days, and left it vacant for the remainder of the year. Her income and expenses are as follows: Rental income $ 18,000 Property taxes 2,500 Mortgage interest 3,500 Utilities 1,100 Repairs and maintenance 1,000 Depreciation 5,200 What is Marnie's net income or loss from the activity

Answer 1

Answer: $11123

Explanation:

Based on the information given, Marnie's net income or loss from the activity will be calculated thus:

Rental income = $18000

Less: Property tax = $2500 × 75/365 = $514

Less: Mortgage interest = $3500 × 75/365 = $719

Less: Utilities = $1100 × 75/97 = $851

Less: Repairs and Maintenance = $1000 × 75/97 = $773

Less: Depreciation = $5200 × 75/97 = $4021

Net income = $11,123