Final answer:
The tax deduction amount for this year is $30,909.09.
Step-by-step explanation:
To calculate the tax deduction amount, we need to determine the value of the building and subtract the value of the land. In this case, the value of the building is $300,000 and the value of the land is $50,000. Therefore, the value of the building is $300,000 - $50,000 = $250,000.
The tax deduction amount is typically based on the depreciation of the building. For residential rental properties, the building can be depreciated over 27.5 years. So, the annual depreciation amount would be $250,000 / 27.5 = $9,090.91.
As the rental income per year is $40,000, you can deduct the $9,090.91 depreciation amount from the rental income. Therefore, the tax deduction amount for this year would be $40,000 - $9,090.91 = $30,909.09.