Choice "C" is correct. The $1,000,000 total cost ($750,000 cash + $250,000 mortgage) should be allocated to the building and the land separately. There is no other information with which to perform this allocation other than the property tax assessment. So, 60% of the $1,000,000, or $600,000, is allocated to the building.
Choice "a" is incorrect. This answer is the $750,000 cash price less the $250,000 mortgage.
Choice "d" is incorrect. This answer is computed as 60% of the assessed value of $960,000. The cost that should be allocated is the total purchase price of the land and building, not the assessed value.
Choice "b" is incorrect. This answer is the assessed value. Even if the assessed value were to be allocated, the full assessed value is not allocated to the building. The land has to be worth something.