Carlos Transfers Property with a Tax Basis of $865 and a Fair

question 44

Multiple Choice

Carlos transfers property with a tax basis of $865 and a fair market value of $1,185 to a corporation in exchange for stock with a fair market value of $975 and $71 in cash in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $139 on the property transferred. What is the corporation's tax basis in the property received in the exchange?

• A) $1,185
• B) $904
• C) $936
• D) $797

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