Which of the following is an increase to basis when figuring the adjusted basis of property?

Question

A. capital improvements
B. Insurance Premiums
C. Utilities
D. all of the above

Answer 1

An improvement can be added to the basis. The improvement has to be more than repair or maintenance or cosmetic updating. Adding a bathroom or installing a new roof are examples.

Insurance premiums would never be added to the basis of property.

Utility bills would never be added to the basis of property. However, an assessment for a utility, such as installation of a sewer, is added to the basis of the land.

Answer 2

A. Only.