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Cabot owns an apartment building that had a fire. He paid $5,000 for smoke remediation...

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Accounting

Cabot owns an apartment building that had a fire. He paid $5,000 for smoke remediation after the fire. The repairs to the buiding cost $12,000 and the roof needed to be replaced for a cost of $21,000. Insurance reimbursed him $18,000 for the roof, $10,000 for the repairs and $5,000 for the smoke remediation. How much did Cabot's basis increase/decrease as a result of the fire?
Decrease of $33,000.
Decrease of $5,000.
Increase of $5,000.
Increase of $38,000.

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