If a taxpayer is required to recapture any tax credit for rehabilitation expenditures, the recapture amount need not be added to the adjusted basis of the rehabilitation expenditures.

Question

Quizplus · Accepted Answer

The recapture amount does need to be added to the adjusted basis of the rehabilitation expenditures. This is because the recapture amount represents a reduction in the original credit that was claimed, which affects the overall tax basis of the property.

If a Taxpayer Is Required to Recapture Any Tax Credit