Latham Corporation constructs a new factory building. The materials cost $300,000. Other costs include direct labor of $150,000, worker pension costs of $5,000, architectural fees of $15,000, and depreciation on equipment of $25,000. The land was purchased for $30,000. A loan of $500,000 is needed to finance the construction, and interest of $40,000 is paid during the year.
Required:
What is Latham's basis in the building?
Answers: 2
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