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Annabelle's great aunt, Sophie, gave her a diamond necklace that Sophie's husband had given her upon the birth of their first child. With the birth

Annabelle's great aunt, Sophie, gave her a diamond necklace that Sophie's husband had given her upon the birth of their first child. With the birth of each subsequent child, a new diamond and setting was added to the necklace, giving the necklace a total of five diamonds. The original cost of the necklace (with one diamond) when purchased by Sophie's husband was $250. Each diamond and setting added to the necklace cost an additional $400. Shortly after receiving the necklace, Annabelle purchased a ruby for $1,200, which she had her jeweler add to the necklace for a cost of $350. The jeweler also charged Annabelle an additional $250 to clean the necklace and check that there were no loose gems. Annabelle's jeweler placed the current appraised value of the necklace at $25,000. What is the adjusted basis of the necklace?

a) $ 3,050 b) $ 3,400 c) $ 3,650 d) $25,000

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