Terry forms the Camphor Corporation during 2013.She transfers property with a value of $700,000 to Camphor Corporation in exchange for 100 percent of the stock in the corporation.Terry's basis in the property transferred was $350,000 and the corporation assumed a $250,000 mortgage on the property.If the fair market value of the stock received by Terry is $450,000,what is the corporation's basis in the property received from Terry?

Question

Quizplus · Accepted Answer

The corporation's basis in the property is the same as Terry's adjusted basis in the property, which is $350,000, as per the rules of Section 351 of the Internal Revenue Code.

Terry Forms the Camphor Corporation During 2013