The General Service Contractor Company paid$400,000 for a house and lot. The value of the landwas appraised at $155,000 and the value of the houseat $245,000. The house was then torn down at anadditional cost of $15,000 so that a warehouse couldbe built on the combined lots at a cost of $1,250,000.What is the value of the property with the warehouse?For depreciation purposes, what is the cost basis forthe warehouse?

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A:

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