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ratelena [41]
3 years ago
9

Rob and Lori purchased a home for $350,000 with an additional $5,000 in related purchase costs and then added a garage at a cost

of $25,000. They sold the home for $450,000 and paid $28,000 in selling costs. How much was adjusted basis?
Business
1 answer:
worty [1.4K]3 years ago
5 0

Answer: $380,000

Explanation:

To calculate the adjusted basis, we add the original cost, to the improvement cost and and then deduct depletion and depreciation cost.

From the scenario, since Rob and Lori purchased a home for $350,000 with an additional $5,000 in related purchase costs and then added a garage at a cost of $25,000 and then sold the home for $450,000 and paid $28,000 in selling costs.

The adjusted basis will be:

= $350,000 + $5,000 + $25,000

= $380,000

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