Meredith has a vacation rental house in the Sierra Mountains. During the year, she and her immediate family used the house for 12 days for a personal vacation. Meredith spent two more weekends (4 days in total) repairing the deck. Meredith also rented her house (at fair value) to her brother and his family for 9 days (in addition to her personal use). The house was rented for 180 days. How should the cabin be categorized this year for tax purposes? Explain your answer.
What will be an ideal response?
The cabin is categorized as personal/rental since the property would be used for more than 18 days for personal use. Rental by family members still counts as personal use even if it is rented for the fair rental value.
You might also like to view...
Theoretically, the amount of estimated future returns and allowances on credit sales should be recorded during the period of the sale so as not to overstate sales and ending accounts receivable. In practice, these estimates are not recorded by most companies because
A. the amount of such returns and allowances tends to fluctuate too greatly from period to period. B. there is too much uncertainty surrounding such estimates. C. such estimates are not allowed according to generally accepted accounting principles. D. the amount of such returns and allowances is usually not material.
List and briefly describe at least four methods to overcome writer's block
An unfavorable materials quantity variance indicates that:
A. actual usage of material exceeds the standard material allowed for output. B. standard material price exceeds actual price. C. actual material price exceeds standard price. D. standard material allowed for output exceeds the actual usage of material.
True or False A Type II error is the probability of rejecting a true null hypothesis
Indicate whether the statement is true or false