Roy Transfers Property with a Tax Basis of $800 and a Fair

question 99

Multiple Choice

Roy transfers property with a tax basis of $800 and a fair market value of $500 to a corporation in exchange for stock with a fair market value of $400 and $50 cash in a transaction that qualifies for deferral under section 351.The corporation assumed a liability of $50 on the property transferred.What is Roy's tax basis in the stock received in the exchange?

• A)$800.
• B)$750.
• C)$700.
• D)$500.

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Definitions:

Fee Simple

The highest interest in land, equivalent to ownership; an estate granting possession for an infinite time.

Co-Ownership

A legal arrangement where two or more parties hold title to a specific property, sharing rights and responsibilities.

Crown

A reference to the state or the monarchy in a legal context, often used in commonwealth countries.

Surface

The outermost or topmost layer of something, often referred to in contexts such as computing, geology, or skin.