Case Study Of Ramon's Is A Taxpayer

Chapter 8
33. "Generally, if the taxpayer is a real estate professional and materially participates in a real property trade or business, then the rental activity should be reported on Schedule C. A taxpayer materially participates in an activity if he or she works on a regular, continuous, and substantial basis in the operation of the rental." (Cruz, 2015)
Ramon's is a tax attorney and he not in the trade or business of renting real estate because it's only treated as rental property.

34. Description Personal Schedule A Schedule E Income $9,000 Mortgage. $3,750 $3,750 Interest
Property Taxes $1,000 $1,000 Utilities $750 $750 Fix Light $100 Rental Fix Dishwasher $250 Paint Exterior $650 $650 Insurance. $900 $900 Depreciation $3,500 $3,500 Total $4,750 $1,650

35. Description Rental Ratio Schedule E Schedule A
Rental Income $1,500
Real Estate Taxes $2,000* (75/365) $411 1,590
Utilities $1,500* (75/97) $1,160
Mortgage Interest $3,800* (75/365) $781 3,019
Repairs & Maintenance $1,300* (75/97) $1,005
Depreciation $7,200
Net Rental Income $4,443

Reference:

Cruz, A., Deschamps, M., Niswander, F., Prendergast, D., Schisler, D., & Trone, J. (2015). Fundamentals of taxation 2015. Boston, MA: McGraw-Hill Irwin.