In January 2022, Meggan acquired an office building in downtown Syracuse, NY, for $400,000. The building was constructed in 1932 and is a certified historic structure. Of the $400,000 cost, $40,000 was allocated to the land. Meggan immediately placed the building into service, but she quickly realized that substantial renovation would be required to keep and attract new tenants. The renovations costing $600,000 were of the type that qualifies for the rehabilitation credit. The improvements were completed in October 2022.

1. Compute Meggans rehabilitation tax credit for the year of acquisition.
2. Determine the cost recovery deduction for 2022.
3. What is the basis of the property at the end of its first year of use by Meggan?