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Sophia is a real estate investor. She purchases a quadruplex for 750 000$. She spends several amounts in the year 2018 for the building: Landscaping:
Sophia is a real estate investor. She purchases a quadruplex for 750 000$. She spends several amounts in the year 2018 for the building:
- Landscaping: 1 000$
- Roof repairs: 20 000$
- Bathroom renovations: 7 500$
- Kitchen renovations: 10 000$
- Renovation permits: 500$
- Cable expenses: 500$
- Electricity expenses: 3 000$
- Publicity expenses for rental: 3 500$
- Real estate commission paid on sales : 4 000$
She sells the quadruplex 4 years later for 1 250 000$.
- Please explain the difference between a maintenance expense and a capital expense.
- Calculate the adjusted cost base on the building and determine what will be the total capital gain on this sale.
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