Question

During the year martin rented his vacation home for three months and spent one month there. Gross rental income from the property was $5,000. Martin incurred the following expenses: mortgage interest $3,000, real estate taxes $1,500, utilities $800, maintenance $500, depreciation $4,000.

Compute Martin`s allowable deductions for the vacation home.

Answer 1

The allowable deductions for Martin's vacation home is $9,800.

Step-by-step explanation:

Let's calculate Martin's allowable deductions for his vacation home:

1. Mortgage interest: $3,000
2. Real estate taxes: $1,500
3. Utilities: $800
4. Maintenance: $500
5. Depreciation: $4,000

To calculate his allowable deductions, we add up all the expenses: $3,000 + $1,500 + $800 + $500 + $4,000 = $9,800.

So, Martin's allowable deductions for the vacation home is $9,800.