Demetri starts a public accounting practice during the current year. He converts 10% of his home into

Question:

Demetri starts a public accounting practice during the current year. He converts 10% of his home into an office. Demetri purchased the property 4 years ago for $100,000. The portion of the purchase price allocated to the house was $80,000. The house (exclusive of the land) is worth $120,000 when he begins operating his practice in his home. What is Demetri’s basis in the home office?