Question: Ted forms the Nutshell Corporation during the current tax year. To form the corporation, Ted transfers assets having a fair market value of $550,000 to

Ted forms the Nutshell Corporation during the current tax year. To form the corporation, Ted transfers assets having a fair market value of $550,000 to Nutshell Corporation for 100 percent of the corporation's stock. Ted's adjusted basis in the assets transferred was $250,000 and Nutshell Corporation assumed a $175,000 mortgage on the assets. If the fair market value of the stock received by Ted is $375,000, what is his basis in the stock received from the corporation?

a.$75,000

b.$550,000

c.$375,000

d.$250,000

e.$425,000

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