Yolanda purchased a home for $650,000. She added a swimming pool at a cost of $25,000 and a patio deck for $8,000. What is her adjusted basis for this property?

Answer 1

To calculate Yolanda's adjusted basis for the property, you need to start with the initial purchase price of the home and then add any improvements made to the property.

Yolanda's initial purchase price is $650,000.

She added:

• A swimming pool for $25,000
• A patio deck for $8,000

Now, you add these costs to the purchase price:

1. Purchase price: $650,000
2. Cost of swimming pool: $25,000
3. Cost of patio deck: $8,000

Now, calculate the adjusted basis:

\[ \text{Adjusted Basis} = \text{Purchase Price} + \text{Cost of Improvements} \] \[ \text{Adjusted Basis} = 650,000 + 25,000 + 8,000 \] \[ \text{Adjusted Basis} = 650,000 + 33,000 \] \[ \text{Adjusted Basis} = 683,000 \]

Therefore, Yolanda's adjusted basis for the property is $683,000.