Alice J. and Bruce M. Jones are married taxpayers who file a joint return. Alices birthday is September 21, 1961, and Bruces is June 27, 1960. Bruce is the office manager for Ames Dental Clinic. Alice is the CPA at Lehman, York & Hunter CPA, LP. The Jones provide over half of the support of their two children, Cynthia (born January 25, 2002, Social Security number (017-44-9126) and John (born February 7, 2000, Social Security number (017-27-4148), who live with them. Both children are full- time students and live with the Jones. The Jones also provided all the support for their 25- year-old son Ryan who recently graduated law school but cannot find employment. Ryan lives in DC. According to Mr. Jones on May 31, 2019, he and his wife exchanged their two- family house in Westchester County (500 William Street, White Plains, NY), which they rented entirely from January 01, 2015 to May 31, 2019, for a four family rental property located at 300 5th Avenue, Brooklyn, NY. At the time of the exchange, the FMV of the two-family house was $1,225,000, and the adjusted basis was $??????? (Calculate based on information provided below). The Four-family house had an adjusted basis of $525,000 and a FMV of $850,000. The two-family home was subject to a $250,000 mortgage, which the buyer assumed. The buyer also included equipment worth $125,000 with and adjusted basis of $200,000. The Jones also owned and rented a two-unit commercial retail building located at 1560 Avenue A, New York NY, which they purchased on October 10, 2018 and placed in service on January 01, 2019. Information for all three of the rental properties is listed below. In April 2019, Bruce decided to start his own business; a retail bicycle shop to be located in NYC near Central Park called Bruces Bikes. On April 20, 2019, Bruce signed a 10-year lease at a monthly rental rate of $10,000, effective May 01, 2019, for retail space on 110th Street and CPW. The lease provided that Bruce was responsible for the costs of improving the retail space for its intended use. The terms of the lease also provided that the first two months were rent-free so that Bruce could complete the construction needed to operate a retail bike shop. When Bruce executed the lease he paid the landlord $30,000 for 2 months security deposit and the first month rent. On May 01, 2019, Bruce paid a contractor $435,000 to provide all construction work relating to the build-out, which included electrical, plumbing, and carpentry. purchased the following assets for the business: On May 01, 2019, Bruce