David pays $35,000 cash and issues a mortgage note for $95,000 to purchase land. He pays $750 to his attorney for reviewing the purchase agreement. David's initial basis in the land is

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David's initial basis in the land includes the cash paid ($35,000), the mortgage note ($95,000), and the attorney fees for reviewing the purchase agreement ($750), totaling $130,750.

David Pays $35,000 Cash and Issues a Mortgage Note for $95,000