Daniel transfers land with a $92,000 adjusted basis and a $100,000 FMV to a corporation in a Sec. 351 transfer. Immediately after the transfer, Daniel owns 100% of the corporation- stock with a FMV of $15,000. In addition, $85,000 of business- related liabilities are assumed by the corporation with respect to the transfer. No other property is transferred. Daniel's basis in the stock is

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Daniel's basis in the stock is calculated as the adjusted basis of the property transferred ($92,000) minus the liabilities assumed by the corporation ($85,000), resulting in a basis of $7,000.

Daniel Transfers Land with a $92,000 Adjusted Basis and a $100,000