Lucy and Marta form Blue Corporation. Lucy transfers land (basis of $40,000 and fair market value of $180,000) for 50 shares plus $20,000 cash. Marta transfers $160,000 cash for 50 shares in Blue Corporation. 

a. Lucy's basis in the Blue Corporation stock is $40,000. 

b. Blue Corporations basis in the land is $40,000. 

c. Blue Corporations basis in the land is $180,000. 

d. Lucy recognizes a gain on the transfer of $140,000. 

e. None of the above.

Answer rating: 100% (QA)

Lucys basis in the Blue Corporation stock is 40000 Lucy recog... View the full answer