Question $31$

$3$ pts

Colby Company performed professional services for M&E Incorporated. In exchange for the services, M&E gave Colby a $12-$month lease on commercial office space. M&E could have charged $$4,350$ monthly rent for the space on the open market. Compute Colby's tax basis in the lease.

The lease is an intangible asset and therefore has a zero basis to Colby.

The lease has a zero basis because Colby obtained the lease at no cost$.$

$$52,200.$

None of these choices are correct.