Kara purchases a home in Dallas, TX for $400,000 which she u…

Kara purchases a home in Dallas, TX for $400,000 which she uses for investment purposes. After purchasing the home, Kara decides to make a few improvements, including painting the walls herself (estimated cost of labor: $500); hiring contractors to install a paver patio (cost: $10,000) and putting in a pool (cost: $50,000). Kara has now owned the home for 5 years and took $7,000 of depreciation deductions each year. What is Kara’s basis in the Dallas property? Explain your answer in full. 

Gianni, a master pastry chef in New York City, works for Tas…

Gianni, a master pastry chef in New York City, works for Tasty Pastries in Chelsea. Last year, Gianni brought in $78,000 in W-2 wages and sold his Corvette, garnering a long-term capital gain of $9,000. Gianni is single, supports 100% of the costs of maintaining his household and the support costs of his two children: Luigi (10) and Mary (15). Luigi and Mary are both in grade school, were born in the United States, and live with Gianni in the Upper West Side of Manhattan. Calculate Gianni’s total tax due and explain your calculations. Assume Gianni has no Section 62 deductions, takes the standard deduction, is not eligible for any tax credits, and does not have any pre-payments to apply towards his total tax due. 

In 2015, Meredith purchased a wooden boat from Boats&Lumber…

In 2015, Meredith purchased a wooden boat from Boats&Lumber in Oklahoma for $125,000. Meredith did not have quite enough cash to make the entire purchase out of pocket, so she ended up putting down $10,000 and financed the remaining $115,000 purchase with a loan from EquityLoans, Inc.  After purchasing the boat, Meredith hired a professional painter to paint and seal the boat in order to protect the wood at a cost of $50,000.  1. What is Meredith’s original cost basis in the boat? 2. Does Meredith have to make any adjustments to her basis in the boat? If so, what adjustments must be made? 3. What is Meredith’s adjusted basis in the boat?