Bernice purchased land and a building for use in connection with her business. The costs associated with this purchase were: Cash down payment $ 40,000

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Bernice purchased land and a building for use in connection with her business. The costs associated with this purchase were:


 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
 Seller-owed back property taxes paid by Bernice
5,000


What is Bernice's tax basis for the land and building?

a. $ 44,500

b. $394,500

c. $397,500

d. $402,500


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