Cost of the furnishing as a bonus depreciation

Assignment Help Financial Accounting

Reference no: EM131286960

In the year 2006, Jay Smith (336-55-1983) paid $125,000 for a condominium that he uses as a rental property. In 2011, he spent $36,000 furnishing the condo. He uses regular MACRS to depreciate the furnishings. In 2011, Jay deducted 50% of the cost of the furnishing as a bonus depreciation. The half

-year convention applies to the furnishings. During 2014, Jay received $15,000 in rental income and paid the following expenses:

Associations dues $1,800

Insurance $150

Mortgage Interest $6,460

Real Estate taxes $1,200

Repairs $760

Utilities $360

The property is located at 3906 East Far Lane #5, Santa Clara, CA 46883. Jay actively participates in the rental activity. His AGI before considering the above income and expenses is $141,400. He depreciates the condominium using MACRS.

Required:

• Prepare Schedule E for Jay.

Show your detailed calculation, particularly for depreciation.

Reference no: EM131286960

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