B is corrent. When a shareholder makes a contribution to the capital of a corporation, no gain or loss is recognized to the shareholder, the corporation has a transferred (carryover) basis for the property, and the shareholder’s original stock basis is increased by the adjusted basis of the additional property contributed. Here, Frigo’s beginning stock basis of $50,000 is increased by the $20,000 basis for the contributed land, resulting in a stock basis of $70,000.
A is incorrect. When a shareholder makes a contribution to the capital of a corporation, no gain or loss is recognized to the shareholder, the corporation has a transferred (carryover) basis for the property, and the shareholder’s original stock basis is increased by the adjusted basis of the additional property contributed. Here, Frigo’s beginning stock basis of $50,000 is increased by the $20,000 basis for the contributed land, resulting in a stock basis of $70,000.
A is incorrect. When a shareholder makes a contribution to the capital of a corporation, no gain or loss is recognized to the shareholder, the corporation has a transferred (carryover) basis for the property, and the shareholder’s original stock basis is increased by the adjusted basis of the additional property contributed. Here, Frigo’s beginning stock basis of $50,000 is increased by the $20,000 basis for the contributed land, resulting in a stock basis of $70,000.
D is incorrect. When a shareholder makes a contribution to the capital of a corporation, no gain or loss is recognized to the shareholder, the corporation has a transferred (carryover) basis for the property, and the shareholder’s original stock basis is increased by the adjusted basis of the additional property contributed. Here, Frigo’s beginning stock basis of $50,000 is increased by the $20,000 basis for the contributed land, resulting in a stock basis of $70,000.
|
