Ralph Birch purchased land and a building which will be used in connection with Birch’s business. The costs associated with this purchase are as follows:

Cash down payment $ 40,000 Mortgage on property 350,000 Survey costs 2,000 Title and transfer taxes 2,500 Charges for hookup of gas, water, and sewer lines 3,000 Back property taxes owed by the seller that were paid by Birch 5,000 What is Birch’s tax basis for the land and building?

a. $ 44,500

b. $394,500

c. $397,500

d. $402,500