Question 1

Taxpayers who use a vacation home for both personal and rental use generally must allocate expenses associated with the home to personal use and to rental use.

Accepted Answer

A) True 
 B)False

Question 2

Careen owns a condominium near Newport Beach in California. This year, she incurs the following expenses in connection with her condo:
  During the year, Careen rented the condo for 90 days, receiving $20,000 of gross income. She personally used the condo for 50 days. Assume Careen uses the IRS method of allocating expenses to rental use of the property. What is Careen's net rental income for the year?

Accepted Answer

$5,633
See...

Question 3

In certain circumstances, a taxpayer could rent her personal residence at a profit and not pay any tax on the income.

Accepted Answer

A) True 
 B)False

Question 4

At most, a taxpayer is allowed to exclude gain on the sale of a principal residence once every five years no matter the circumstances.

Accepted Answer

A) True 
 B)False

Question 5

Harriet owns a second home that she rents to others. During the year, she used the second home for 10 personal days and for 200 rental days. Which of the following statements regarding the manner in which she should account for her income and/or expenses associated with the home is false?

Accepted Answer

A)  Harriet's deductible expenses are not limited to the amount of gross rental income from the property.
B)  Harriet will be allowed to deduct all of the mortgage interest on the loan secured by the property.
C)  Harriet is required to include all of the rental receipts in gross income.
D)  Harriet is required to allocate all expenses associated with the home to rental use or personal use.E) A) and B)
F) A) and C)

Question 6

When a taxpayer rents a residence for part of the year, the residence is not eligible as a qualified residence for the home mortgage interest expense deduction unless the taxpayer's:

Accepted Answer

A)  personal use of the home exceeds the taxpayer's rental use of the home.
B)  personal use of the home exceeds half of the taxpayer's rental use of the home.
C)  personal use of the home exceeds the lesser of 14 days or 10 percent of the taxpayer's rental use of the home.
D)  personal use of the home exceeds the greater of 14 days or 10 percent of the taxpayer's rental use of the home.E) All of the above
F) B) and C)

Question 7

What is the maximum amount of gain on the sale of principal residence a married couple may exclude from gross income?

Accepted Answer

A)  $0.
B)  $25,000.
C)  $250,000.
D)  $500,000.E) A) and B)
F) B) and C)

Question 8

Which of the following statements regarding limitations on the deductibility of home office expenses of employees is correct?

Accepted Answer

A)  Deductible home office expenses of employees are not deductible.
B)  Deductible home office expenses of employees are deductible as itemized deductions.
C)  Deductible home office expenses of employees are for AGI deductions limited to gross income from the business.
D)  Deductible home office expenses of employees are for AGI deductions not limited to gross income from the business.E) A) and D)
F) A) and B)

Exam 14: Tax Consequences of Home Ownership

Harriet owns a second home that she rents to others. During the year, she used the second home for 10 personal days and for 200 rental days. Which of the following statements regarding the manner in which she should account for her income and/or expenses associated with the home is false?

Correct Answer
verified

In certain circumstances, a taxpayer could rent her personal residence at a profit and not pay any tax on the income.

Correct Answer
verified

Correct Answer
verified
$5,633
See...
View Answer

Taxpayers who use a vacation home for both personal and rental use generally must allocate expenses associated with the home to personal use and to rental use.

Correct Answer
verified

At most, a taxpayer is allowed to exclude gain on the sale of a principal residence once every five years no matter the circumstances.

Correct Answer
verified

What is the maximum amount of gain on the sale of principal residence a married couple may exclude from gross income?

Correct Answer
verified

When a taxpayer rents a residence for part of the year, the residence is not eligible as a qualified residence for the home mortgage interest expense deduction unless the taxpayer's:

Correct Answer
verified

Which of the following statements regarding limitations on the deductibility of home office expenses of employees is correct?

Correct Answer
verified

Exam 14: Tax Consequences of Home Ownership

Harriet owns a second home that she rents to others. During the year, she used the second home for 10 personal days and for 200 rental days. Which of the following statements regarding the manner in which she should account for her income and/or expenses associated with the home is false?

Correct AnswerverifiedShow Answer

In certain circumstances, a taxpayer could rent her personal residence at a profit and not pay any tax on the income.

Correct AnswerverifiedShow Answer

Correct Answerverified$5,633See...View AnswerShow Answer

Taxpayers who use a vacation home for both personal and rental use generally must allocate expenses associated with the home to personal use and to rental use.

Correct AnswerverifiedShow Answer

At most, a taxpayer is allowed to exclude gain on the sale of a principal residence once every five years no matter the circumstances.

Correct AnswerverifiedShow Answer

What is the maximum amount of gain on the sale of principal residence a married couple may exclude from gross income?

Correct AnswerverifiedShow Answer

When a taxpayer rents a residence for part of the year, the residence is not eligible as a qualified residence for the home mortgage interest expense deduction unless the taxpayer's:

Correct AnswerverifiedShow Answer

Which of the following statements regarding limitations on the deductibility of home office expenses of employees is correct?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
$5,633
See...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified