What are the tax consequences under the court approach

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Problem 1: During the year, David rented his vacation home for three months and spent one month there. Gross rental income from the property was $15,000. David incurred the following expenses: mortgage interest, $3,000; real estate taxes, $1,500; utilities, $800; maintenance, $500; and depreciation, $14,000. What are the tax consequences under the court's approach?

a. Goss income of $5000 and no deductions
b. Gross income of $5000 and deductions of $5000 from AGI
c. Gross income of $5000 and $3875 of deduction for AGI and $1,125 deductions from AGI
d. Gross income of $5000 and $500 of deduction for AGI and $4,500 deductions from AGI
e. Gross income of $5000 and $5000 of deductions for AGI
f. None of the above.

Reference no: EM132807326

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