On April, 2019, Greg entered into an agreement to exchange an eight-unit rental apartment building for a four-unit rental apartment building. The closing took place on August 20, 2019 at which time the transfers were completed. Gregs adjusted basis for the eight-unit building was $320,000 and the fair market value was $400,000. The fair market value of the four-unit building, which was subject to a $40,000 mortgage, was $440,000 on the date of the transaction, and had an adjusted basis to the owner, Tom, of $420,000. What is Gregs basis in the four-unit building? (PLEASE EXPLAIN WHY)

1. $320,000
2. $360,000
3. $400,000
4. $420,000