Assuming Alexa receives $20,000 in gross rental receipts, answer the following

questions:
a. What effect does the rental activity have on her AGI for the year?
b. Assuming that Alexa’s AGI from other sources is $90,000, what effect does
the rental activity have on Alexa’s AGI? Alexa makes all decisions with respect
to the property.
c. Assuming that Alexa’s AGI from other sources is $120,000, what effect does
the rental activity have on Alexa’s AGI? Alexa makes all decisions with respect
to the property.
d. Assume that Alexa’s AGI from other sources is $200,000. This consists of
$150,000 salary, $10,000 of dividends, and $25,000 of long-term capital gain
and net rental income from another rental property in the amount of $15,000.
What effect does the Cocoa Beach Condo rental activity have on Alexa’s AGI?

NEED HELP GETTING STARTED.

nerrr

To determine the effect of the rental activity on Alexa's Adjusted Gross Income (AGI), we need to consider the rules set by the Internal Revenue Service (IRS) for rental income.

a. Gross rental receipts are the total amount of rental income received before any deductions. The rental activity will have an effect on Alexa's AGI, as the gross rental receipts are included as part of her total income for the year.

b. To calculate the effect of the rental activity on Alexa's AGI, we need to add the gross rental receipts to her AGI from other sources. In this case, Alexa's AGI from other sources is $90,000. Therefore, her total AGI (including rental income) would be $90,000 + $20,000 = $110,000.

c. Similarly, if Alexa's AGI from other sources is $120,000 and she receives $20,000 in gross rental receipts, her total AGI including rental income would be $120,000 + $20,000 = $140,000.

d. In this scenario, Alexa's AGI from other sources is $200,000, which includes $150,000 salary, $10,000 dividends, $25,000 long-term capital gain, and $15,000 of net rental income from another property. To calculate the effect of the Cocoa Beach Condo rental activity, we need to add the gross rental receipts ($20,000) to Alexa's net rental income from the other property ($15,000). Therefore, her total rental income would be $20,000 + $15,000 = $35,000. Adding this to her AGI from other sources, Alexa's total AGI (including rental income) would be $200,000 + $35,000 = $235,000.

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I think it's safe to say Alexa's condo is NOT a qualified residence (she did not reside in it at all) - that said, Alexa makes all decisions with respect to the property, qualifying her as an active participant . . . so, is she able to deduct the mortgage interest (as long as her AGI does not exceed the limit)??