Chen contributes property with an adjusted basis of $80,000 and a fair market value of $100,000 to

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Question:

Chen contributes property with an adjusted basis of $80,000 and a fair market value of $100,000 to a newly formed business entity. If the entity is a C corporation and the transaction qualifies under § 351, the corporation’s basis for the property and the shareholder’s basis for the stock are:

Asset Basis / Stock Basis

a. $ 80,000/$100,000

b. $100,000/$ 80,000

c. $ 80,000/$ 80,000

d. $100,000/$100,000