Question

Emily purchased a building to store inventory for her business. The purchase price was $895,000. Emily also paid legal fees of $450 to acquire the building. In March, Emily incurred $2,000 to repair minor leaks in the roof (from storm damage earlier in the month) and $5,300 to make the interior suitable for her finished goods. What is Emily’s cost basis in the new building?

Answer 1

Emily’s cost basis in the new building is $900,750.

Step-by-step explanation:

Cost basis in the new building

= Purchase price of building + legal fees + Cost of interior design

= $895,000 + $450 + $5,300

= $900,750

Therefore, Emily’s cost basis in the new building is $900,750.