Jessie purchases an office building for $400,000, paying a $75,000 cash down payment and borrowing $325,000 from the bank. The purchase price is properly allocated 90% to the building and 10% to the Two years after the purchase, Jessie remodeled one floor of the building at a cost of $25,000. Annual maintenance costs and property taxes total $4,000. A total depreciation of $36,000 is deducted over the 3 years. Determine the adjusted basis of the building and the land as of the end of year 3:

Group of answer choices

$349,000 building; $40,000 land

$ 89,000 building; $10,000 land

$353,000 building; $40,000 land

$346,500 building; $42,500 land

$ 56,500 building; $ 7,500 land