My question concerns the following exercise:
My thought process is as follows:
Reducing a matrix to row-reduced echelon form renders it to its basis vectors.
If I row reduce the row space, which is just taking this matrix and reducing it to row-reduced echelon form, I'll have the bases.
If I take the columns as rows and do the same as the above, I'll have bases for the column space.
For both subspaces of $\mathbb R$ to have the same rank, they must have the same number of basis vectors.
Okay, so I first row reduced the row-space. Here is the matrix:
$$ \begin{pmatrix} 1 & 0 & 0 & 1 \\ 0 & 1 & 0 & -2 \\ 0 & 0 & 1 & -1 \\ \end{pmatrix} $$
From here, I postulated that the basis is (I'm not sure whether it's this or $4$ column vectors, because I'm not sure if I take row or column vectors for my bases from this matrix, but intuition says row vectors since this is a row space):
$$B_1:={(1,0,0,1),(0,1,0,-2),(0,0,1,-1)}$$
Then, the column space (which I got just by basically rotating the row-space matrix clockwise 90 degrees):
$$ \begin{pmatrix} 1 & 1 & 1 \\ 0 & 0 & 1 \\ 0 & 1 & -1 \\ 1 & 0 & 0 \\ \end{pmatrix} $$
Reduces to $I_3$.
So, if I say that the basis for this column-space is:
$$B_2:={(1,0,0), (0,1,0), (0,0,1)}$$
Then, $B_1$ and $B_2$ have the same number of basis vectors, so $dim B_1 = dim B_2$? The thing is though, $B_1$ contains vectors in $\mathbb R^4$ while $B_2$ contains vectors in $\mathbb R^3$. Have I got this mucked up? Because this lack of agreement of dimensions bother me. I reckon my way of determining dimension is wrong or my way of taking the basis vectors from the reduced matrix is wrong.

That's correct, the dimension of the column space should be equal to the dimension of the row space. More clearly, if $A$ is an $m \times n$ matrix, then
$$Rank(A) = \dim(RS(A)) = \dim(CS(A))$$
where $RS(A)$ and $CS(A)$ denote the row and column space of $A$, respectively. So, when you reduce a matrix to echelon form, then the number of pivots must equal $Rank(A)$. What you have done is found a basis , $B_1$, for the row space of $A$ and a basis, $ B_2$, for the column space of $A$. Then you have noticed that indeed, $B_1$ and $B_2$ each have 3 linearly independent vectors, to which we can conclude
$$ \dim(RS(A)) = \dim(CS(A)) = 3.$$
Now, since this is a $3 \times 4$ matrix, clearly each row vector should be in $\mathbb{R}^4$, and each column vector in $\mathbb{R}^3$. So no, there is not a lack of agreement in the dimensions, you are actually correct. If you had an $n \times n $ matrix, then the rows and the column vectors would both be in $\mathbb{R}^n$, however in your example the matrix isn't square.