F and G formed a corporation on March 1 this year.F transferred equipment worth $40,000 (basis $15,000) in exchange for 40 shares of stock, and performed services worth $10,000 in exchange for 10 shares of stock.In exchange for 50 shares of stock, G contributed land worth $70,000 (basis $9,000) subject to a mortgage of $20,000, which the corporation assumed.Assuming G recognized $27,500 of gain on the exchange, the corporation's basis for the land received is

Question

Quizplus · Accepted Answer

The corporation's basis in the land is the sum of two things:
1. G's adjusted basis in the land before the transfer ($9,000)
2. The amount of gain recognized by G on the transfer ($27,500)
So the total basis is $9,000 + $27,500 = $36,500.

F and G Formed a Corporation on March 1 This