1 A corporation receives land with a basis of 23 and a fair

1. A corporation receives land with a basis of $ 23 and a fair market value of $ 59 in return for common stock. The shareholder recognizes a gain of $ 2 on the transfer. What is the corporation\'s basis in the land?

Solution

Corporation receives land with a basis = $ 23

fair market value = $ 59

Shareholder recognizes gain on the transfer = $ 2

Corporation\'s basis in the land = $23 + $2

= $25