Answer:
Adjusted basis $ 405,000
Explanation:
The adjusted basis will add to the original purchase price the capital improvements and decrease conidering the depreciation.
expenditures related to maintenance or repairs would not increase the adjusted basis as those just maintain the current value. It has to be an improvement, like redising, add a room, a bathroom plant some valuable ornament trees or any of these kind of expenses. Change a broken window for a new one is not considered capital improvement.
Original Purchase Price: $500,000
Capital Improvements: $ 89,000
Depreciation: $( 184,000)
Adjusted basis $ 405,000
Answer: using adjusted basis, property value= $405000
Explanation:
Using adjusted basis to value the property for tax purpose, sum the original purchased price with the capital improvement cost and then subtract depreciation( capital reduction) .
Value of property = (500000+89000)÷184000=405000
