An investor owns a negatively geared property with annual rental income of $25,000 and total deductible expenses of $35,000. If their marginal tax rate is 37%, what is their annual tax saving?
Correct Answer
A) $3,700
The net loss is $10,000 ($35,000 expenses minus $25,000 income). At a 37% marginal tax rate, the tax saving is $10,000 × 37% = $3,700.
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