Determine the basis of stock in the hands of the shareholder in each of the foll

Question

Determine the basis of stock in the hands of the shareholder in each of the following instances.
a. Contribution of property with a basis of $1,000 and a FMV of $1,400.
b. Contribution of property with a basis of $3,000 and FMV of $3,800. The stockholder also received $500 cash from the corporation as part of the stock transaction.
c. Contribution of property with a basis of $8,200 and a FMV of $12,500. The stockholder also received property with a FMV of $1,700 from the corporation as part of the stock transaction.
d. Contribution of a building with a FMV of $200,000, a maortgage (assumed by the corporation) of $100,000, and a basis of $125,000.
e. Contribution of a building with a FMV of $1,700,000, a mortage (assumed by the corporation ) of $1,000,000, and a basis of $635,000.

Explanation / Answer

my god, is this an income tax ques? i swear i just studied this for a final i just took. basis is the cost that u paod for the stock. you gotta pick the lower of the two values, either its fmv now or what u paid for it before, the basis. or you can subtract the fmv from the cost basis and figure out if u got a gain or loss. w/ the mortgage, its prob. irrelevant. is the 80% rule an income tax rule? need more info

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