Question

1.       Which of the following statements is/are false?

	A.	Even if a real estate activity does not rise to the level of conducting a trade or business, expenses paid for the management, conservation, or maintenance of property held for the production of income are tax deductible.
	B.	It is NOT necessary for property held for the production of income to have ACTUAL INCOME in a given tax year for the management, conservation, and maintenance expenses of the property to be currently tax deductible.
	C.	While the costs of repairing and maintaining real property are currently tax deductible, the determination of whether a particular expenditure is a repair or a non-deductible capital expenditure that must be depreciated has been problematic for both taxpayers and the IRS. These problems have resulted in the issuance of the very technical and complex "repair regulations.".
	D.	All of the above are true.

Answer 1

The answer to above is OPTION D- All the Above are TRUE

Option A- It is not possible in every real estate business that the expenses incurred in the particular year to be adjusted against the income of that particular year. It may happen that they are carried forward and set off against the income received next year, in such cases expenses are allowed to be tax deductible.

Option B- Income can be on acrual basis also or relating to previous years or next years.

Option C- The issues are still there in respect to their accountibility