Question

Several years ago, Junior acquired a home that he vacationed in part of the time and rented out part of the time. During the current year Junior:

Personally stayed in the home for 19 days.

Rented it to his favorite brother at a discount for 11 days.

Rented it to his least favorite brother for twelve days at the full market rate.

Rented it to his friend at a discounted rate for fourteen days.

Rented the home to third parties for 72 days at the market rate.

Did repair and maintenance work on the home for two days.

Marketed the property and made it available for rent for 156 days during the year (in addition to the days mentioned above).

How many days of personal use and how many days of rental use did Junior experience on the property during the year?

Days of personal use ?
Days of rental use ?
5. In year 1, Peter and Shaline Johnsen moved into a home in a new subdivision. Theirs was one of the first homes in the subdivision. In year 1, they paid $2,700 in real property taxes to the state government, $1,490 to the developer of the subdivision for an assessment to pay for the sidewalks, and $1,430 for real property taxes on land they hold as an investment. What amount of property taxes are the Johnsens allowed to deduct assuming their itemized deductions exceed the standard deduction amount before considering any property tax deductions?

Deductible tax amount?

Answer 1

1. a. Days of Personal Use:

= Days stayed personally + Days rented at a discount + Days rented to family

= 19 + 14 + 11 + 12

= 56 days

b. Days of rental use:

= Days rented to third parties at full rate + Days taken for repairs and maintenance

= 72 + 2

= 74 days

2. Deductible tax amount:

= Real property taxes to state government + Property taxes on land held as investment

= 2,700 + 1,430

= $4,130

The Johnsens may not deduct the amount paid for the assessment for the sidewalks as they are considered local benefits much like streets and these are not tax deductible.