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Problem:

Carlton purchases land for $400,000. He incurs legal fees of $8,000 associated with the purchase. He subsequently incurs additional legal fees of $25,000 in having the land rezoned from agricultural to residential. He subdivides the land and installs streets and sewers at a cost of $700,000.

Required:

What is Carlton's basis for the land and the improvements?

Note: Please provide through step by step calculations.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91170529

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