Carl purchased a building costing $120,000 in 2001 for use in his landscape business. In 2010, he built an addition to the building at a cost of $30,000. In 2013, a tornado damaged the building. The cost of repairing the building was $22,000 and Carl's insurance company paid $16,000 of the cost of the repairs. Depreciation deducted on the building for 2001 through 2018 totaled $18,000. What is Carl's adjusted basis in the building at the end of 2018? Explain.

Question

Quizplus · Accepted Answer

The Answer of Carl purchased a building costing $120,000 in 2001 for use in his landscape business. In 2010, he built an addition to the building at a cost of $30,000. In 2013, a tornado damaged the building. The cost of repairing the building was $22,000 and Carl's insurance company paid $16,000 of the cost of the repairs. Depreciation deducted on the building for 2001 through 2018 totaled $18,000. What is Carl's adjusted basis in the building at the end of 2018? Explain.

Carl Purchased a Building Costing $120,000 in 2001 for Use