Benedict transfers land with a FMV of $900,000 to a newly-formed corporation in exchange for all of the stock.The land has a basis of $500,000 and debt of $300,000.The basis of the land,in the hands of the corporation is:

Question

Quizplus · Accepted Answer

The basis of the land in the hands of the corporation is the same as the transferor's basis, which is $500,000, as per the rules of Section 351 of the Internal Revenue Code, assuming no gain or loss is recognized on the transfer.

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