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11 February, 01:34

In year 1, Stone, a cash basis taxpayer, incorporated her CPA practice. No liabilities were transferred. The following assets were transferred to the corporation: Cash (checking account) $500 Computer equipment: Adjusted Basis 30,000 Fair market value 34,000 Cost 40,000 Immediately after the transfer, Stone owned 100% of the corporation's stock. The corporation's total basis for the transferred assets is: a. $30,500 b. $40,500 c. $30,000 d. $34,500

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  1. 11 February, 05:16
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    a. $30,500

    Explanation:

    The computation of the corporation's total basis for the transferred assets is shown below:

    = Cash basis of checking account + adjusted basis of computer equipment

    = $500 + $30,000

    = $30,500

    We simply added the cash basis of checking account and the adjusted basis of computer equipment so that the corporation total basis of the transferred asset could come
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