Wendy purchased a vacation home for $275,000 and paid $600 in legal fees. She also paid $5,500 in closing cost

Question

Wendy purchased a vacation home for $275,000 and paid $600 in legal fees. She also paid $5,500 in closing costs for a survey, title search, and recording fees, and gave her realtor a $200 gift card. What is Wendy's basis in the vacation home?

GPT-5 mini · Answer

Wendy's basis = purchase price + capitalized acquisition costs = $275,000 + $600 (legal fees) + $5,500 (survey, title search, recording) = $281,100.

The $200 gift card to the realtor is a personal gift and not added to the home's basis.

Wendy purchased a vacation home for $275,000 and paid $600 in legal fees. She also paid $5,500 in closing costs for a survey, title search, and recording fees, and gave her realtor a $200 gift card. What is Wendy's basis in the vacation home?

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