Marlene Is a Single Taxpayer with an Adjusted Gross Income

question 149

Multiple Choice

Marlene is a single taxpayer with an adjusted gross income of $140,000.In addition to her personal residence,Marlene owns a ski cabin in Vail.She uses the cabin for 40 days during the current year and rents it out to unrelated parties for 80 days,receiving rent of $10,000.Marlene's costs before any allocation related to the cabin are as follows:
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Based on the above information,what is her allowable depreciation deduction?

• A)$- 0 -
• B)$1,000
• C)$3,000
• D)$4,000
• E)$6,000

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Definitions:

Intercompany Sales

Transactions involving the exchange of goods or services between subsidiaries within the same parent company.

Mark-Up

The amount added to the cost price of goods to cover overhead and profit, resulting in the selling price.

Effective Tax Rate

The true percentage of earnings that a person or business pays to the government, determined by dividing their total tax contribution by their taxable income.

Consolidated Statements

Consolidated Statements are financial reports that aggregate the financial position and operating results of a parent company and its subsidiaries, presenting them as a single entity.