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):

Gross rental income	$	9,700
Interest and taxes		6,100
Utilities and maintenance		2,560
Depreciation		4,500

How much can Nicolette and Brady deduct for depreciation expense related to this property for the year on their tax return?

Multiple Choice

• $4,500.

• $1,040.

• $0.

• The answer cannot be determined.