Question

Yolanda bought a vacation home for $255,000, plus $500 in legal fees. She also paid an additional closing cost of $4,500 to cover the cost of a survey, title search, and recording fees. She also gave her realtor a gift card for $500. What is the basis of her vacation home?

Answer 1

The basis of Yolanda's vacation home is $260,500, calculated by summing up the purchase price, legal fees, closing costs, and the value of the gift card she gave to her realtor.

Step-by-step explanation:

The basis of Yolanda's vacation home is determined by the total amount she paid for the home, including additional costs and expenses. Firstly, she bought the home for $255,000. Then, she paid $500 in legal fees and an additional $4,500 for closing costs. Additionally, she gave a gift card worth $500 to her realtor.

To calculate the basis of her vacation home, we need to add up all these amounts:

1. 
   
3. Purchase price: $255,000
4. 
   
6. Legal fees: $500
7. 
   
9. Closing costs: $4,500
10. 
    
12. Realtor gift card: $500

The total amount Yolanda paid for her vacation home, or the basis, is $260,500.