Individuals Julie and Brandon form JB Corporation.Julie transfers cash of $425,000 in exchange for 50% of the stock of the JB Corporation worth $410,000 and a $15,000 note.Brandon transfers equipment with a $390,000 adjusted basis and a $425,000 FMV for 50% of the stock worth $410,000 and a note of the JB Corporation valued at $15,000.Brandon's basis in the stock received is

Question

Quizplus · Accepted Answer

Brandon's basis in the stock received is equal to the FMV of the equipment he transferred, which is $425,000, reduced by the amount of the note he received, which is $15,000. Therefore, his basis in the stock is $410,000.

Individuals Julie and Brandon Form JB Corporation