Several years ago,Sarah purchased a structure for $300,000 that was originally placed in service in 1929.In the current year,she incurred qualifying rehabilitation expenditures of $400,000.The amount of the tax credit for rehabilitation expenditures,and the amount by which the building's basis for cost recovery would increase as a result of the rehabilitation expenditures are the following amounts:

Question

Quizplus · Accepted Answer

The tax credit for rehabilitation expenditures is 10% of the qualifying expenditures, which is $40,000 ($400,000 x 10%). The basis increase is the rehabilitation expenditures minus the credit, which is $360,000 ($400,000 - $40,000).

Several Years Ago,Sarah Purchased a Structure for $300,000 That Was