Question

Tom and George form T and G Corporation. Tom transfers machinery worth $100,000 with a basis to Tom of $40,000, while George transfers land worth $90,000 with a basis to George of $20,000 and services rendered in organizing the corporation worth $10,000. Each is issued 25 shares in T and G Corporation. With respect to the transfers:A. Tom has no recognized gain; George recognizes gain/income of $80,000. B. Neither Tom nor George recognizes gain or income. C. T and G Corporation has a basis of $30,000 in the land. D. George has a basis of $30,000 in the shares of T & G Corporation.

Answer 1

The answer is D.

George has a basis of $30,000 in the shares of T & G Corporation.

Step-by-step explanation:

George has a basis of $30000 in the shares of T&G corporation

I.e (20000+10000) = 30000