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Al's father and mother were placed in a nursing home. They gave him the family farm before their admission. The farm has been in the family for as long as his father can remember. His father has no idea what the original purchase price of the farm was. Al's parents have made the following improvements to the land while it was in their possession.
Installed fencing $ 6,000
Built 2 new barns $ 45,000
Installed a new well $ 2,250
Addition to the house $ 35,000
Paved driveway $ 1,100
Installed storm windows $ 3,000
Problem 1: The farm's Fair Market Value was $335,000 at the time of changing hands. What is Al's basis in the farm?
a) $ 0
b) $ 83,000
c) $ 92,350
d) $335,000
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