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

Multiple Choice

Several years ago, Sarah purchased a certified historic 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) $40,000 credit; $200,000 basis.
C) $40,000 credit; $350,000 basis.
D) $40,000 credit; $160,000 basis.