A is corrent. The requirement is to determine the basis for the purchased land. The basis of the land consists of the cash paid ($60,000), the purchase money mortgage ($45,000), and the cost of the title insurance policy ($150), a total of $105,150.
B is incorrect. The property cost more than $60,000.
C is incorrect. The land’s basis includes the mortgage.
D is incorrect. The land’s basis includes the title insurance policy.
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