Tom and George form Swan Corporation with the following investments: Tom transfers machinery worth $100,000 (basis of $40,000), while George transfers land worth $90,000 (basis of $20,000) and services rendered in organizing the corporation worth $10,000.Each is issued 25 shares in Swan Corporation.With respect to the transfers:
A)Tom has no recognized gain; George recognizes gain/income of $80,000.
B)Neither Tom nor George recognizes gain or income.
C)Swan Corporation has a basis of $30,000 in the land.
D)George has a basis of $30,000 in the shares of Swan Corporation.
E)None of the above.

Question

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The Answer of Tom and George form Swan Corporation with the following investments: Tom transfers machinery worth $100,000 (basis of $40,000), while George transfers land worth $90,000 (basis of $20,000) and services rendered in organizing the corporation worth $10,000.Each is issued 25 shares in Swan Corporation.With respect to the transfers:
A)Tom has no recognized gain; George recognizes gain/income of $80,000.
B)Neither Tom nor George recognizes gain or income.
C)Swan Corporation has a basis of $30,000 in the land.
D)George has a basis of $30,000 in the shares of Swan Corporation.
E)None of the above.

Tom and George Form Swan Corporation with the Following Investments