Tired of working out of your home office and eager to expand your Schedule C accounting practice, you recently had begun looking for a small office building to buy. Much to your surprise, however, the place you ended up falling in love with wasnt an office building at all; rather, it was a beautiful old craftsman-style house, built in the 1920s, in Dallass Uptown neighborhood. Additional facts:

• The house really was a home that is, used as a personal residence only by the owner.

• The house was listed for sale at $1.5 million.

• The deal youve negotiated with the owner was that you will (i) transfer title to your 100 acres of ranchland in Hunt County (FMV $1.25 million) and (ii) also pay $250,000 cash for the house.

• Youre not the rancher type yourself but you had been leasing out the property to a neighbor rancher who used it for additional grazing land for his cattle.

• You had inherited the ranchland from Old Granddad five years ago. Your tax basis in the land was $800,000.

On these facts, briefly state (i) whether this transaction will or will not qualify as a 1031 like-kind exchange (as to your ranchland) and (ii) your tax basis in the house in Uptown after the deal closes (but before any remodeling that you have to do to turn it into an office fit for an accounting practice).