contestada

Ilene rents her second home for the entire year. During the year, Ilene reported a net loss of $10,700 from the rental. If Ilene is an active participant in the rental and her AGI is $142,500, how much of the loss can she deduct against ordinary income in the year?

Respuesta :

nrbass31

Answer:

$3,750

Explanation:

(142,500-100000)*50% = 21,250

25,000-21,250 = $3,750

chilljain33

Ilene can claim a deduction up to a maximum limit of $3,750 against her ordinary income for that financial year, in case of meeting with the above conditions.

What is deduction?

Deduction refers to as the amount which a person can claim as being exempt from tax during the year in which a person is liable to pay taxes as such. There is a capacity of standard deduction of $100,000 for a year.

Deduction in the above case will be half of the amount left after considering a standard deduction from the AGI will be $21,250. Now, maximum allowed deduction will be deducted from an amount of $25,000.

This can be calculated as,

[tex]\rm Deduction= Maximum\ Allowed\ Limit- Actual\ Liability\\\\\rm Deduction= 25000 - 21250\\\\\rm Deduction=\$3750[/tex]

Hence, the significance of deduction is aforementioned.

Learn more about deduction here:

https://brainly.com/question/13757943

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