Car Co. is selling its land and building to Truck Co. for $340,000 (Land $200,000; Building $140,000). These values have not been officially appraised, and Truck Co. thinks that the land is only worth $150,000 and the building is worth $190,000. (Car Co. originally paid $100,000 for the land and constructed the building for $150,000. The UCC on the building is currently $130,000.) Which of the following statements is TRUE based on these facts?

Multiple Choice

• Future CCA will be higher for Truck Co. if Car Co.'s terms are accurate

• Car Co. will recognize higher net capital gains if Truck Co.'s terms are accurate

• Car Co. will recognize higher recapture if Truck Co.'s terms are accurate.

• The allocation of the costs is irrelevant for tax purposes as the total price is the same under both sets of terms.