18. Chaka owns a warehouse that he uses in his medical supply business. A flood damages the building when it has an adjusted basis of $400,000. Chaka deducts a casualty loss under sectic 165 in the amount of $400,000, and properly reduces its basis in the office building to $0. Chaka pays $200,000 to restore the building by shoring up walls and replacing the building faade. Chaka also pays $40,000 for draining water from the building, cleaning rubbish and debris from the interior and exterior, and making minor repairs to the dry wall. How should these cost be treated for tax purposes? a. $40,000 must be expensed and $200,000 capitalized b. $240,000 must be capitalized c. $240,000 must be expensed d. $200,000 must be expensed and $40,000 capitalized e. There is not enough information to answer the