Fundamentals of Taxation 2011 4th Edition by Ana Cruz, Debra Prendergast, Dan Schisler, Michael Deschamps

Exercise 32

Nicolette and Brady own a cabin in Lake Arrowhead, California that they rent out during the winter and use the rest of the year. The rental property is categorized as personal/rental property, and their personal use is determined to be 68% (based on the IRS method). They had the following income and expenses for the year (after allocation):
How much can Nicolette and Brady deduct for depreciation expense related to this property for this year on their tax return?
A) $0.
B) $1,000.
C) $4,300.
D) Answer cannot be determined.