1. Herbert Nash has owned a 200-acre parcel of land for several years. He had purchased the land for $250,000 with the intention of eventually building a home on the property. However, he received an offer of $425,000 for 75 acres of the property. Because these 75 acres had waterfront and better road access, he believed that the FMV of the remaining 125 acres was only $175,000. He accepted the offer and planned to use an ACB of $177,083 [$250,000 X $425,000/($425,000 + $175,000)] in calculating his gain or loss. 2. Gregory Hayes sold a capital property with an ACB of $85,000 for $135,000. The $135,000 price included a charge for a warranty on the property which he anticipates will cost him $5,000 to service. He did not anticipate any of the warranty expenses would be incurred in the year of the sale. He planned to recognize a capital gain on the transaction of $45,000 after the consideration of the estimated warranty costs