Problem
Jeff Walker is the sole owner of a small hardware and appliance store. He owns the building in which the store is located and maintains a small office in the back where he can do the books and keep track of sales on his computer. The store's major source of revenue is the sale of televisions. Jeff has also authored a "how- to" book and has retained the copyright in his name.
This year, Jeff purchased a parcel of raw land on which he could construct a new building for his hardware business. He paid $50,000 for the land and incurred $350 in legal fees associated with the title search. What is Jeff's cost basis in the land?