Henry transfers property with an adjusted basis of $95,000 and an FMV of $100,000 to a newly formed corporation in a Sec. 351 exchange. Henry receives stock with an FMV of $85,000 and a short-term note with a $15,000 FMV. Henry's basis in the stock is
A)$100,000.
B)$95,000.
C)$90,000.
D)$85,000.

Question

Quizplus · Accepted Answer

Henry's basis in the stock is equal to the adjusted basis of the property transferred, which is $95,000.

Henry Transfers Property with an Adjusted Basis of $95,000 and an FMV