Question $8$

$"$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.

What is the gain or loss recognized by B$?$

What is B$\text{'}$s basis in B$\text{'}$s C Corporation Stock

$$15,000$ gain; $$15,000$ basis

No gain or loss; $$35,000$ basis

No gain or loss; $$50,000$ basis

$$15,000$ gain; $$50,000$ basis