What is the adjusted basis in the home


Problem:

Guthrie purchased his home for $300,000. As a sole proprietor, he operates a certified public accounting practice in his home. For this business, he uses one room exclusively and regularly as a home office. In Year 1, $1,450 of depreciation expense on the home office was deducted on his income tax return. In Year 2, Guthrie sustained losses in his business; therefore, no depreciation was taken on the home office. Had he been allowed to deduct depreciation expense, his depreciation expense would have been $1,700. What is the adjusted basis in the home?

a. $295,000.

b. $296,850.

c. $298,550.

d. $300,000.

e. None of the above.

Solution Preview :

Prepared by a verified Expert
Accounting Basics: What is the adjusted basis in the home
Reference No:- TGS01936439

Now Priced at $20 (50% Discount)

Recommended (97%)

Rated (4.9/5)