On April 1, Gardner Company purchased real estate paying $100,000 (i.e., cash down payment), issuing a $900,000 interest-bearing note (i.e., a mortgage), and agreeing to pay the $25,000 of accrued property taxes on the property. The building represents 75 percent of the purchase price, and the land represents the remaining 25 percent. Gardner spent $200,000 remodeling the building's and begins using the building on October 1 . None of the remodeling costs qualify for Sec. 179 immediate expensing. Rather they are capitalized to the cost of the real estate. Assuming that the building is an office building (i.e., non-residential real estate), determine Gardner Company's 

(i) maximum and 

(ii) minimum allowable cost recovery deduction for the first year

Answer rating: 100% (QA)

To determine Gardner Companys maximum and minimum allowable cost recovery deductions for the first y... View the full answer