Ms. M exchanged real property used in her business that had an adjusted basis to her of

$12,000, with an outstanding liability of $2,000, for new real property to be used in her business,

with a fair market value of $11,000 and $1,000 in cash. Ms. M's liability was assumed by the

other party. What is Ms. M's basis in the new real property?

A.

$9,000

B.

$10,000

C.

$11,000

D.

$12,000