Michelle purchased her home for $150,000,and subsequently added a garage costing $25,000 and a new porch costing $5,000.Repairs to the home's plumbing cost $1,000.The adjusted basis in the home is
A)$150,000.
B)$151,000.
C)$180,000.
D)$181,000.

Question

Quizplus · Accepted Answer

The adjusted basis is calculated by adding the cost of improvements to the purchase price. The garage and porch are improvements, so $150,000 + $25,000 + $5,000 = $180,000. Repairs do not increase the basis.

Michelle Purchased Her Home for $150,000,and Subsequently Added a Garage