Nigel and Frank Form NFS, Inc

question 80

Multiple Choice

Nigel and Frank form NFS, Inc. an electing S corporation, by combining the assets of their respective businesses. Nigel contributes $10,000 and assets worth $90,000 (adjusted basis of $60,000) for a 1/3 interest. Frank contributes $90,000 and assets worth $270,000 (adjusted basis of $150,000) for a 2/3 interest. NFS also assumes $60,000 of debt on Frank's assets. What is Frank's basis in his stock?

• A)$180,000
• B)$220,000
• C)$240,000
• D)$300,000
• E)$360,000