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
