Chee, single, age 40, had the following income and expenses during 2015:
Income
Salary …………………………………………………………. $43,000
Rental of vacation home (rented 60 days, used
personally 60 days, vacant 245 days) ………………………… 4,000
Municipal bond interest ………………………………………. 2,000
Dividend from General Electric ………………………………. 400
Expenses
Interest on home mortgage ……………………………………. 8,400
Interest on vacation home …………………………………….. 4,758
Interest on loan used to buy municipal bonds ………………… 3,100
Property tax on home ………………………………………….. $2,200
Property tax on vacation home ………………………………… 1,098
State income tax ………………………………………………. 3,300
State sales tax …………………………………………………. 900
Charitable contributions ………………………………………. 1,100
Tax return preparation fee …………………………………….. 300
Utilities and maintenance on vacation home ………………….. 2,600
Depreciation on rental 50% of vacation home ………………… 3,500
Calculate Chee’s taxable income for the year before personal exemptions. If Chee has any options, choose the method that maximizes his deductions.
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