Question

Amber is in the process this year of renovating the office building (originally placed in service in 1976) used by her business. Because of current Federal Regulations that require the structure to be accessible to handicapped individuals, she incurs an additional $11,000 for various features, such as ramps and widened doorways, to make her office building more accessible.
The $11,000 incurred will produce a disabled access credit of what amount?

a) $0. b) $5,000. c) $5,125. d) $5,500.

Answer 1

Answer:

Correct option is (b)

Explanation:

Disabled access credit is granted by IRS to small business owners on expenses incurred by them in making their structure accessible for physically handicapped people. Cost incurred could be on constructing ramps for wheelchairs or providing hear aids to people with hearing impairment.

The maximum credit is $5,000 or 50% of cost not exceeding $10,250 ($250 initial cost cannot be claimed for exemption), whichever is less.

Here, Cost incurred is $11,000. So 50% (10,250 - 250) or 0.5×10,000 that is $5,000 would e Amber's disabled access credit.