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

question 71

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 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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