Three Individuals Transferred Property to Newly Formed Triple Inc

question 98

Multiple Choice

Three individuals transferred property to newly formed Triple Inc. in exchange for 1,000 shares of common stock. Mr. Albert transferred assets with a $50,000 tax basis in exchange for 820 shares, Mrs. Billig transferred assets with a $9,000 tax basis in exchange for 148 shares, and Mrs. Crisp transferred $4,000 cash for 32 shares. Based on the FMV of the transferred assets, each Triple share is worth $125. Which of the following is false?

• A) Mr. Albert's tax basis in his 820 shares is $50,000.
• B) Triple Inc.'s tax basis in the assets transferred by Mrs. Billig is $9,000.
• C) Mrs. Crisp's tax basis in her 32 shares is $4,000.
• D) None of these choices are false.

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