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John has a vacation condo in the Florida Keys that he rented out for two weeks...

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Accounting

John has a vacation condo in the Florida Keys that he rented outfor two weeks in December for $250 a day. John has used thisvacation home himself for a total of three weeks during the year.His total ( unallocated) expenses for the condo are

Taxes: $1,500

Insurance: $2000

Repairs and maintenance: $1,100

Interest: $4,500

Depreciation for the year: $1,000

John received a call from his tenants and they want to extendtheir rental of the condo for another week. John is in the 35percent marginal tax bracket. What tax factors should John considerin making the decision to extend the rental of the condo?

Answer & Explanation Solved by verified expert
4.2 Ratings (697 Votes)
Mr John is in 35 marginal tax bracket This marginal tax rate means that your immediate additional income will be taxed at this rate Johns immediate additional income is 25071750 marginal tax on this    See Answer
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