Question

emily spent $166,000 to rehabilitate a certified historic building (adjusted basis of $107,900) that originally had been placed in service in 1936. what is emily's rehabilitation expenditures tax credit? $fill in the blank 1

Answer 1

Emily is eligible for a rehabilitation tax credit which is 20% of her rehabilitation expenditures of $166,000 on a certified historic building, resulting in a tax credit of $33,200.

Step-by-step explanation:

Emily's rehabilitation expenditures tax credit is based on the amount spent to rehabilitate a certified historic building. The tax credit for rehabilitating certified historic structures is generally 20% of the qualified rehabilitation expenditures (QRE).

In Emily's case, she spent $166,000 on rehabilitation. Therefore, to calculate her tax credit, you would take 20% of her total rehabilitation expenses.

Rehabilitation Tax Credit = 20% × Rehabilitation Expenditures

Emily's Rehabilitation Tax Credit = 20% × $166,000

Emily's Rehabilitation Tax Credit = $33,200