Ch 9 HW Solutions

# Ch 9 HW Solutions - Chapter 9 Selected Homework Solutions...

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Remodeling cost 8,000 Parking lot and sidewalks \$12,000 Depreciation (70,620 ) (1,000 ) Adjusted basis \$187,380 \$80,000 \$11,000 23. Determine the adjusted basis of each of the following assets: a. André purchases a parcel of land three years ago at a cost of \$17,000. In the current year, the adjoining property owner sues him, claiming that part of André's property belongs to him under the right of adverse possession. André incurs \$4,000 in legal fees successfully defending against the lawsuit. He pays annual property taxes of \$300 on the land and has paid \$3,700 in interest on the loan he took out to acquire the property. The adjusted basis is equal to the \$17,000 initial basis plus the \$4,000 of legal fees to defend title to the property (an expenditure that benefits beyond the current period) for a total of \$21,000. The property taxes and interest are current period expenditures that are deducted in the period they are paid. b. René purchases 1,000 shares of Cramdem Company common stock for \$8
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## Ch 9 HW Solutions - Chapter 9 Selected Homework Solutions...

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