Explain the tax advantage

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Reference no: EM131526139

Question: Western Bank & Trust purchased land and a building for the lump sum of $3,000,000. To get the maximum tax deduction, Western allocated 90% of the purchase price tot he building and only 10% to the land. A more realistic allocation would have been 70% to the building and 30% to the land.

Requirements:

1. Explain the tax advantage of allocating too much to the building and too little to the land.

2. Was Western's allocation ethical? If so, state why. If not, why not? Identify who was harmed.

Instructions:Your initial response should be no less than 250 words. Reply to at least two of your classmates. In-text citations and references may be in APA format but is NOT required.

Reference no: EM131526139

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