Kelly, Tanya, and Barry form The Paint Corporation. Kelly transfers a building (A/B $5,000, FMV $90,000); 

Tanya invests $50,000 cash and performs services worth $25,000. 

Barry transfers equipment (A/B $55,000, FMV $35,000) and land (A/B $40,000, FMV $40,000). 

They each receive 50 shares in The Paint Corporation, and each share is worth $1,500. 

The corporation assumes a $15,000 mortgage that Kelly owes on the building. The mortgage has business purpose. 

What is Barry's stock basis?

Answer rating: 100% (QA)

SOLUTION Barrys stock basis will depend on the fair market value of the property he contributed to t... View the full answer