Vanessa Owns a Houseboat on Lake Las Vegas That She

question 757

Multiple Choice

Vanessa owns a houseboat on Lake Las Vegas that she personally uses for 25 days out of the year and rents for 280 days. For tax purposes, the houseboat is classified as

• A) rental property. Expenses in excess of income may be deducted although net income or loss is subject to the passive activity rules.
• B) neither a residence nor rental property. Because it is rented a nominal number of personal- use days, both revenue and expenses (other than those otherwise allowable) are ignored.
• C) a combination of the taxpayer's residence and rental property. The deduction for expenses is limited to the amount of income generated by the property.
• D) property that is treated as a hobby, not allowing any deductions.

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Definitions:

Private Property

Ownership of property (land, buildings, goods, etc.) by individuals or corporations legally recognized.

Public Use

The use of property or resources for the benefit or welfare of the general public or community.

State Governments

The governing bodies of individual states within a federal system, responsible for local law enforcement, education, and other public policies.

Executed

The carrying out of a sentence of death on a person convicted of a capital crime, or the completion of a planned or ordered process.