Arturo 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 $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 land to the corporation is the basis that Arturo had in the land at the time of transfer, which is $600,000. The debt on the land is not relevant to the basis of the land in the hands of the corporation. Therefore, the correct answer is C) $600,000.

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