Western Bank& Trust purchased land and abuilding for the lump sum of $3,000,000.To get the maximum tax deduction, Western allocated 90% of the purchase price to the building and only 10% to the land.A morerealisticallocationwouldhave been 70% to the building and 30% to the land.

• Explainthe taxadvantage of allocating too much to the building and too little to the land.
• Was Western'sallocation ethical?If so, state why.If not,why not?Identify who was harmed.