Federal Tax Research 10th Edition by Steven Gill, Gerald Whittenburg, Roby Sawyers, Debra Sanders, William Raabe

Exercise 42

Monica purchased two acres of land with an old building on it for $1 million. The purchase was made to acquire the land for a new store she wanted to open on the property. Shortly after completing the purchase, Monica pays $80,000 to have the old building demolished. How does Monica treat the $80,000 demolition payment for tax purposes
a. Locate the Code section(s) that deals with this situation. State the section number(s).
b. Review the Code section(s). Does it raise a need for new information to solve this question
c. Are you able to reach a conclusion about the research question from this Code section If so, what is your conclusion(s)