Kassim Company purchased an asset by paying $35,000 cash and giving the seller its 3-year note for $240,000. Which of the following statements is true?
A. Kassim's book basis and tax basis in the asset is $35,000.
B. Kassim's book basis is $275,000, but its tax basis is $35,000.
C. If Kassim is a cash basis taxpayer, its initial tax basis in the asset is zero.
D. Kassim's book basis and tax basis in the asset is $275,000.
Answer: D
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