Sign Company purchased the net assets of Post Company in a business combination accounted for as a purchase. As a result, goodwill was recorded. For tax purposes, this combination was considered to be a tax- free merger. Included in the assets is a building with an appraised value of $210,000 on the date of the business combination. This asset had a net book value of $70,000, based on the use of accelerated depreciation for accounting purposes. The building had an adjusted tax basis to Atlantic (and to Vibe as a result of the merger) of $120,000. Assuming a 36% income tax rate, at what amount should Sign record this building on its books after the purchase?

a. $120,000
b. $134,400
c. $140,000
d. $210,000

From what I can tell, I think the asset should be recorded at fair value on the books after purchase for the parent company. So, I think the answer is D. Does anyone have any insight on this?

I've been reading around and still haven't found any information that would make me think my previous comment was not right. I"d really appreciate some input though.