Hamid owns and lives in a duplex. He rents the other unit to an unrelated mar- ried couple for $850 per month. During the current year, he incurs the following expenses related to the duplex:
|
Mortgage interest
|
|
$7,500
|
|
Property taxes
|
|
1,100
|
|
Utilities
|
|
1,450
|
|
Repairs
|
|
|
|
Paint exterior of duplex
|
$2,200
|
|
|
Fix plumbing in rental unit
|
320
|
|
|
Shampoo carpet in both units
|
290
|
|
|
Fix dishwasher in Hamid's unit
|
120
|
2,930
|
|
Homeowner's association fee
|
|
480
|
|
Insurance
|
|
800
|
|
Special property tax assessment to pave sidewalks
|
|
3,100
|
|
Depreciation (both units)
|
|
4,200
|
How should Hamid treat the expenditures related to the duplex? Explain.