Robyn Rents Her Beach House for 60 Days and Uses

question 9

Multiple Choice

Robyn rents her beach house for 60 days and uses it for personal use for 30 days during the year.The rental income is $6,000 and the expenses are as follows:
​

Using the IRS approach,total expenses that Robyn can deduct on her tax return associated with the beach house are:

• A)$0.
• B)$6,000.
• C)$8,000.
• D)$12,000.
• E)None of the above.

---

Definitions:

Explicit Costs

Direct, out-of-pocket expenses paid by firms for inputs to production, such as wages, rent, and materials, as opposed to implicit costs which are not directly paid out in cash.

Implicit Costs

The opportunity costs that are not directly paid for or incurred during the production of a good or service.

Average Total Cost

The complete expenditure of manufacturing (incorporating steady and fluctuating expenses) divided by the aggregate volume of goods produced.

Output

The total quantity of goods or services produced by a company, sector, or economy within a given period.