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Building Heritage Specialist

Real-Life Activities

Real-Life Math -- Solution

This is how you would determine if your client would save more money by spending $500,000 or $600,000, factoring in the 25 percent tax credit.

Actual cost of restoration = C - (C x T)

C = Initial cost of restoration
T = Tax credit

Plug in the numbers:

C = 600,000
T = 0.25
Actual cost = 600,000 - (600,000 x 0.25)
Actual cost = 600,000 - 150,000
Actual cost = 450,000

Given the available tax credit, it would actually cost $50,000 less for your client to spend $600,000 than to spend $500,000.