James was given a house last year by his father, Michael. At the date of the gift the fair market value of $175,000, and its adjusted basis to the...

James was given a house last year by his father, Michael. At the date of the gift the fair market value of $175,000, and its adjusted basis to the donor (his father, Michael) was $105,000. The donor paid gift tax of $12,000 on the gift. What is James basis in the house?

a. $105,000

b. $109,800

c.$117,000

d.$175, 000