Home&Business. 1st yr. using 30% of home for bus. TT says use lesser of fair market value or original basis (do improvements increase basis?)

[dan3]

Orig. purchase $111,000 1991. Capital Improvements of $200,000 as of 12/31/15. Current market value $359,000.  is basis $111,000 or $311,000?

[AmyT · Accepted solution]

The basis is $311,000 - the original purchase price plus the cost of the improvements.