All tax calculations should be based on the 2020 Tax Rate Schedules. Figures should be rounded to the nearest dollar. Percentages should be rounded to the nearest whole percentage (e.g., 32% instead of 32.2%)

Vacation home. Saoirse owns a vacation home which she uses for vacation for 30 days and rents to strangers at fair rental value for 30 days. The rest of the year it is not used. She uses the IRS method to allocate expenses. She had $4,000 of rental income. She paid no mortgage interest or real estate taxes. Operating expenses (including maintenance, insurance, utilities, etc.) were $10,000. Depreciation would be $6,000 if the home were solely used as a rental. (To be clear, the expenses noted above are all totals BEFORE allocation.) What expenses can she deduct for the rental use of the vacation home?

A) $1,000 of operating expense; $3,000 of depreciation

B) $2,500 of operating expense; $1,500 of depreciation

C) $4,000 of operating expense; no depreciation

D) $5,000 of operating expense; $3,000 of depreciation