Carl Purchased a Building Costing $120,000 in 2001 for Use

question 128

Essay

Carl purchased a building costing $120,000 in 2001 for use in his landscape business. In 2010, he built an addition to the building at a cost of $30,000. In 2013, 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 2001 through 2018 totaled $18,000. What is Carl's adjusted basis in the building at the end of 2018? Explain.

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Definitions:

Conflict Theory

A sociological perspective that views social life as a competition, and focuses on the distribution of resources, power, and inequality.

Shared Understanding

The common knowledge or consensus among members of a group, society, or organization regarding beliefs, practices, norms, or values.

Capitalism

An economic system where private ownership and free market principles dominate, aiming for profit through production and exchange.

Exploitation

The unfair treatment or use of someone or something for one's own advantage or profit, often without proper compensation.