Several Years Ago, Sarah Purchased a Structure for $150,000 That

Multiple Choice

Several years ago, Sarah purchased a structure for $150,000 that was placed in service in 1929. In the current year, she incurred qualifying rehabilitation expenditures of $200,000. 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.

A) $20,000 credit, $180,000 basis.
B) $20,000 credit, $200,000 basis.
C) $20,000 credit, $350,000 basis.
D) $40,000 credit, $160,000 basis.