Trolette contributes property with an adjusted basis of $80,000 and a fair market value of $100,000 to a newly formed business entity.If the entity is a C corporation and the transaction qualifies under § 351,the corporation's basis for the property and the shareholder's basis for the stock are: Asset Basis Stock Basis
A)$ 80,000 $100,000
B)$100,000 $ 80,000
C)$ 80,000 $ 80,000
D)$100,000 $100,000
E)None of the above.

Question

Quizplus · Accepted Answer

Under § 351, the corporation takes a carryover basis in the property, which is $80,000, and the shareholder's basis in the stock received is also $80,000, which is the adjusted basis of the property contributed.

Trolette Contributes Property with an Adjusted Basis of $80,000 and a Fair