Hester Corporation purchases a building by giving stock with a fair market value of $30,000 (original cost was $21,000) and borrowing $210,000. Hester pays closing costs of $10,000 on the purchase. For property tax purposes, the land is assessed at $10,000 and the building at $40,000. Before buying the property, Hester hires an independent appraiser and receives appraisals of $21,000 on the land and $279,000 on the building. Compare initial bases of the properties using different allocation methods.

What initial basis amounts should Hester use? Explain. Is there any other way to determine initial basis?