Rehabili tation Tax Credit. Bob acquired a certified
historic structure and placed it in service August of the current year, as an
office for his business. He paid $20,000 for the building (exclusive of the
land) and spent $40,000 for renovation coses.
a. What is the rehabilitation tax credit (before
limitations)?
b. What is the basis of the building for MACRS depreciat ion
purposes?
c. Compute the deprec iation chat Bob can take on the
building for the current year
For the previous four years, Pharm Inc. had average gross
receipts of $5,000,000. The company’s fixed-base percentage is 3% . Compute
Pharm lnc.’s current year credit for research activities. ls Phann Inc.
entitled to claim any deduction for research and experimentat ion expenses for
the current year?
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