Ann is constructing a building that she will rent residential tenants. Construction costs during the construvtion period totaled $4,000,000 and were directly financed by a loan of $3,000,000 from Main Street Bank. The balance of construction cotst came from cash previously borrowed from Eastern Bank totaling $1,200,000. The loan was borrowed two years before the construction began. Ann has not made any principal payments on either loan and has no other available funds or outstanding debt. Assume the interest charged for both loans was 10% and the construction period lasted for one year. How much of the interest, if any, must be capitalized during the construction period? a $120,000 b $300,000 c $400,000 d $420,000 ($300K $120K) e $0 if Ann taxpayer files a proper election with her return