Alicia sold her personal residence to rick on june 30 for $295,000. before the sale, alicia paid the real estate tax of $4,425 for the calendar year. for income tax purposes, the deduction is apportioned as follows: $885 to alicia and $3,540 to rick. what is rick's basis in the residence?

$291,460

Explanation:

Data provided in the question:

Purchasing cost of the personal residence = $295,000

Real estate tax paid by Alice before the sale  = $4,425

Property tax allocated to Alicia = $885

Property tax allocated to Rick = $3,540

Now,

Rick's basis in the residence will be

= Purchase cost - Property taxes allocated to Rick

= $295,000 - $3,540

= $291,460

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