Winston is the sole shareholder of Winston Inc,an S corporation.In 2016,he paid $50,000 for his shares of stock.During the current year,he contributes a building and land to the corporation.No additional shares of stock are issued.The basis of this property is $75,000,and its fair market value is $200,000.What is Winston's basis in his Winston stock at the end of 2017?

Question

Quizplus · Accepted Answer

Winston's basis in his stock increases by the basis of the property contributed. His original basis was $50,000, and he contributed property with a basis of $75,000, so his new basis is $50,000 + $75,000 = $125,000.

Winston Is the Sole Shareholder of Winston Inc,an S Corporation