| Janet Geist, who owns 400 shares of Q. X. Computers, Inc., makes an additional contribution of $4,000 in cash and property with a fair market value of $6,000 (and an adjusted basis of $3,000) to help fund the corporation\'s expansion plans. Which one of the following statements is not correct? |
| a. | Janet does not have to recognize any gain on the transfer of property to the corporation. |
| b. | Janet\'s basis in her 400 shares is increased by $10,000. |
| c. | Q. X. Corporation does not have to include any amount in its gross income. |
| d. | Q. X. Corporation\'s basis in the property contributed is $3,000. |
| Janet Geist, who owns 400 shares of Q. X. Computers, Inc., makes an additional contribution of $4,000 in cash and property with a fair market value of $6,000 (and an adjusted basis of $3,000) to help fund the corporation\'s expansion plans. Which one of the following statements is not correct? |
The answer is option (b). \"Janet\'s basis in her 400 shares is incresed by $10,000\". As this statement is not correct, because Janet\'s not purchased the shares of worth $10,000, although she contributed on assests such as cash of $4,000 and property with a fair market value of $6,000 (adjusted basis value $3,000) but these contributions will not increase value of her 400 shares.
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