Kigin Company spent $240,000 to clean up hazardous waste that had contaminated land used in Kigin's business. Which of the following statements is true?
A. Kigin can deduct the $240,000 as a repair expense.
B. If Kigin purchased the land in an uncontaminated state, it can deduct the $240,000 because the expenditure is merely returning the land to its original condition.
C. Kigin must capitalize the $240,000 expenditure to the cost of the land.
D. None of the above is true.
Answer: B
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