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Problem 1: Several years ago, Nia paid $160,000 to have her home built on a lot that cost her $10,000. Before changing the property to rental use last year, she paid $20,000 for permanent improvements to the house and claimed a $2,000 casualty loss deduction for damage to the house, which is located in a federally declared disaster area. On the date of change in use, her property has a FMV of $180,000, of which $30,000 is for the land and $150,000 is for the house. Her depreciable basis for the house is
Option 1: $160,000 Option 2: $150,000 Option 3: $180,000 Option 4: $178,000
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