Lavinia owns an advertising agency. In February 2011, she purchases for $32,000 a building that was originally placed in service in 1918. Lavinia spends $65,000 rehabilitating the building for use as her advertising agency office. The rehabilitation is completed in November 2011.
a. What criteria must Lavinia meet to qualify for the older buildings rehabilitation tax credit?
b. Assuming that she meets all qualifying criteria, what are the amounts for Lavinia’s older buildings rehabilitation tax credit and the basis of the building?
c. What criteria must Lavinia meet to qualify for the historic structures credit?
d. Assume that Lavinia meets the criteria in part c and that the building qualifies for both credits. What is the total of the rehabilitation credits for 2011? What is the basis of the building?