Catherine owns a vacation cottage on the lake. During the current year, she rented it out

for 10 days. The rental income was $2,500. Catherine lived in the cottage for 2 months during

the summer. The cottage was vacant the remainder of the year. The yearly expenses for the

cottage are $10,400 consisting of:

$6,000 Mortgage Interest

$500 Property Taxes

$1,500 Utilities and Maintenance

$2,400 Depreciation