As part of a "C" reorganization, T Corporation transfers assets with a basis of $300,000 and a fair market value of $500,000.T receives stock of A Corporation worth $400,000 and $100,000 worth of other property with a basis to A of $75,000.What is the basis of the other property received by T Corporation as part of the consideration from A Corporation?

Question

Quizplus · Accepted Answer

The basis of the other property received by T Corporation as part of the consideration from A Corporation is equal to the lesser of the fair market value of the property or the adjusted basis of the property in the hands of the transferor (A Corporation).

In this case, the fair market value of the other property received is $100,000 and the adjusted basis of the property in the hands of A Corporation is $75,000. Therefore, the basis of the other property received by T Corporation is $75,000.

Option A is incorrect because the $75,000 is the adjusted basis of the other property in the hands of A Corporation, not the basis of the property received by T Corporation.

Option C is incorrect because it refers to the basis of the assets transferred by T Corporation and not the other property received from A Corporation.

Option D is incorrect because it does not take into account the adjusted basis of the other property in the hands of A Corporation.

As Part of a "C" Reorganization, T Corporation Transfers Assets