Real Estate Math

A West Virginia property has a cost basis of $180,000 and has depreciated by $30,000 over the holding period. The adjusted cost basis is:

A$210,000
B$150,000✓ Correct
C$180,000
D$160,000

Explanation

Adjusted cost basis = Original cost basis - Accumulated depreciation = $180,000 - $30,000 = $150,000. For tax purposes, gains on sale are calculated on the adjusted (not original) cost basis.

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