Carl Purchased a Building Costing $120,000 in 1998 for Use

question 41

Essay

Carl purchased a building costing $120,000 in 1998 for use in his landscape business.In 2008,he built an addition to the building at a cost of $30,000.In 2011,a tornado damaged the building.The cost of repairing the building was $22,000 and Carl's insurance company paid $16,000 of the cost of the repairs.Depreciation deducted on the building for 1998 through 2013 totaled $18,000.What is Carl's adjusted basis in the building at the end of 2013? Explain.

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Definitions:

Transferable Interest

A stake or share in a property or enterprise that can be legally transferred from one party to another.

Dissolution

The process of legally dissolving a corporation or partnership, effectively bringing its existence to an end.

RUPA

Refers to the Revised Uniform Partnership Act, which is a set of laws adopted by some U.S. states to govern the formation, operation, and dissolution of partnerships.

Duty Of Loyalty

The legal obligation of individuals, such as corporate directors or employees, to act in the best interests of their company or employer.