Brad and Rochelle agree to form Sail Away, Inc., a small family boat rental business. Brad agrees to contribute 20 sailboats that he bought over many years (and had a lot of fun with!) with a total basis of $70,000 and a FMV of $170,000 at the time of the incorporation for stock and a note payable to him from the corporation with a basis and FMV equal to $10,000. Rochelle agrees to contribute a small piece of waterfront property and a dock purchased many years ago with a total basis of $30,000 and a fair market value of $150,000. In return, each receives 50% of the 200 authorized shares of Sail Away stock. 

What is Brad's basis in the Sail Away Stock that he receives in the transaction?

Answer rating: 100% (QA)

To determine Brads basis in the Sail Away stock that he receives in the transaction we need to consi... View the full answer