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On January 1, 2017, Barry Barker owned rental property which had an adjusted basis to him of $350,000. Daniel made the following expenditures during 2017:
- On January 1, 2017, Barry Barker owned rental property which had an adjusted basis to him of $350,000. Daniel made the following expenditures during 2017:
Ordinary painting of building | $ 6,000 |
Repair of roof section (useful life not appreciably extended) | 1,500 |
Legal fees paid to defend title | 3,000 |
Property taxes | 7,000 |
Assessment for local street improvement (value of property increased greatly) | 5,000 |
In 2017, which of these expenditures does Barry capitalize and which does he expense? What is his adjusted basis in the building at year end? (Ignore depreciation.)
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