Whether a building is purchased or constructed, the same items are used to compute the price of the building.

Question

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When a building is purchased, the price includes the purchase price, closing costs, and costs for renovations or repairs that make the building ready for its intended use. When constructing a building, the cost includes materials, labor, overhead, and any interest on construction loans. The components considered in the cost computation can differ significantly between purchasing and constructing a building.

Whether a Building Is Purchased or Constructed, the Same Items