Arturo transfers land with a FMV of $900,000 to a newly-formed corporation in exchange for all the stock.The land has a basis of $600,000 and debt of $400,000.The basis of the land,in the hands of the corporation is:

Question

Quizplus · Accepted Answer

The basis of the property in the hands of the corporation is the same as the donor's basis immediately before the transfer, which is $600,000. The debt assumed by the corporation does not affect the basis of the land. Therefore, the correct choice is C.

Arturo Transfers Land with a FMV of $900,000 to a Newly-Formed