How should hamid treat the expenditures related to the


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.

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