An apartment building was purchased and financed with the following first-year operating results, compute the investor's income tax liability. (Assume 27.5 years of usable life)

Purchase price $3 million, of which 28% is attributed to land value.

Financed with $2 million interest-only loan at 10% for 10 years.

First-year NOI is $300,000

Investor's marginal tax rate is 25%