Final answer:
Robert can deduct his property taxes and mortgage interest, for a total deduction of $11,000. Anne cannot deduct the property taxes paid by Robert. Robert's deductions are itemized deductions and there are potential strategies to improve the tax consequences, such as gifting money to Anne or claiming her as a dependent.
Step-by-step explanation:
To address the student's question regarding the tax deductibility of Robert's expenses, here is a classification of the expenses:
- Property taxes - Robert: Deductible
- Property taxes - Anne: Nondeductible for Robert
- Mortgage interest: Deductible
- Repairs: Nondeductible
- Utilities: Nondeductible
- Replacement of roof: Nondeductible
Robert's total deductions would be the sum of the deductible expenses. Therefore, the total is the property taxes of $3,000 plus the mortgage interest of $8,000, which equals $11,000.
b. Anne cannot deduct the $1,500 property taxes paid by Robert, as she did not personally pay them.
c. The deductions for property taxes and mortgage interest are generally from AGI, meaning they are itemized deductions.
d. To potentially improve tax consequences:
- Robert can make a cash gift to Anne so she can pay her expenses, potentially allowing her to take the deduction if she itemizes and is not dependent on another taxpayer.
- If Robert can claim Anne as a dependent, it may affect his ability to deduct her expenses based on dependent-related tax benefits.