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.