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 line 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