Taxpayer purchased a residence for $500,000 and spent $100,000 renovating the kitchen, floors, and bathrooms. What is Taxpayer's adjusted basis in the residence? Taxpayer's adjusted basis in the residence equals the cost basis of $500,000. Taxpayer's adjusted basis in the residence equals the cost basis of $500,000, plus improvements of $100,000. Taxpayer's adjusted basis in the residence equals the cost basis of $500,000, less improvements of $100,000. None of the above is a correct statement of the Taxpayer's adjusted basis