Rehabilitation Credit
Response to the following problem:
In 2013, Harriet purchased an office building that had originally been placed in service in 1932. Harriet paid $100,000 for the building, and over the next 15 months, she spent an additional $150,000 to rehabilitate it.
a. Compute Harriet's credit for rehabilitation expenditures.
b. Compute Harriet's basis in the building for depreciation purposes if she elects to take the rehabilitation credit.
c. How would your answers to Parts a. and b. differ if the building were a certified historic structure?