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Lolita purchases a business for $650,000.

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Lolita purchases a business for $650,000. The fair market value of the assets of the business is as follows:

Equipment $ 350,000
Building 250,000

What is Lolita's cost basis in each asset?

a. $350,000 equipment, $250,000 building, $0 goodwill.
b. $379,167 equipment, $270,833 building, $50,000 goodwill.
c. $350,000 equipment, $250,000 building, $50,000 goodwill.
d. $379,167 equipment, $270,833 building, $0 goodwill.
e. None of the above.

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