LO5 Nathaniel purchases a house by paying $25,000 in cash and securing a home mortgage for $75,000. He also incurs $3,000 in legal fees, title search, and closing costs. He agrees to pay the property taxes for the entire year ($6,000), even though his share would be $1,000. A neighbor pays Nathaniel $50 for a playhouse located in the backyard. As the neighbor is moving the playhouse from the property, he accidentally damages Nathaniel’s fence. The neighbor is unaware of the damage. Not wanting to cause trouble in a new neighborhood, Nathaniel pays

$100 to have the fence repaired. Write a letter to Nathaniel explaining his basis in the house.