Steve Purchased His Home for $500,000

question 132

Multiple Choice

Steve purchased his home for $500,000. 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, $3,042 of depreciation expense on the home office was deducted on his income tax return. In Year 2, Steve 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 $3,175. What is the adjusted basis in the home?

• A)$493,783
• B)$496,825
• C)$496,958
• D)$500,000
• E)None of the above

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Definitions:

Demassification

A process by which the mass audience is fragmented into small groups or niches to appeal to unique interests.

Mass Media

Forms of communication designed to reach large audiences through mediums like television, newspapers, radio, and the internet.

Audience Segment

A subgroup of a larger audience distinguished by specific characteristics, such as demographics or behavioral patterns, allowing for targeted content or advertising.

Newspapers

Printed publications consisting of sheets of paper that contain news, articles, advertisements, and other information.