Question $10$

$"$A$"$ and $"$B$"$ form $"$C Corporation", a new corporation. A contributes real

property with a fair market value of $$50,000$ and an adjusted basis of $$25,000,$

in exchange for $50\%$ of the stock of $C$ corporation. A has owned the real

property contributed for two years. B contributes $$35,000$ of Cash and

contributes services valued at $$15,000$ and in return receives $50\%$ of the stock

of $C$ Corporation.

If A sells his $C$ corporation stock one year after the formation of $C$ Corporation

for $$15,000,$ what will A$\text{'}$s gain or loss be$?$

$$15,000$ Gain

No Gain or Loss

$$25,000$ Gain

$$10,000$ Loss