Hillside Group, a partnership, purchased a certified historic building for $60,000 that was originally placed in service in 1929. The partnership incurs $180,000 rehabilitating the building. The building serves as the partnership's headquarters. The rehabilitation is completed in November 2018. What amount can the Hillside Group claim on their partnership return as a rehabilitation tax credit?

Question

Quizplus · Accepted Answer

The Hillside Group can claim a rehabilitation tax credit equal to 20% of the qualified rehabilitation expenses for certified historic structures, which includes the cost of rehabilitation after the building was acquired. In this case, the qualified rehabilitation expenses are $180,000, so the tax credit is $36,000 (20% of $180,000). Therefore, the correct answer is D.

Hillside Group, a Partnership, Purchased a Certified Historic Building for $60,000