Gearty and Olinto organized The Worthington Corp., which issued voting common stock with a fair market value of $240,000. They each transferred property in exchange for stock as follows: Property Gearty Building Olinto Land The building was subject to a $20,000 mortgage that was assumed by The Worthington Corp. What was The Worthington Corp.'s basis in the building? a. $60,000 b. $80,000 c. $144,000 d. $164,000 Adjusted Basis $80,000 10,000 Fair Market Value $164,000 96,000 Percentage of The Worthington Corp. Stock Acquired 60% 40%
Gearty and Olinto organized The Worthington Corp., which issued voting common stock with a fair market value of $240,000. They each transferred property in exchange for stock as follows: Property Gearty Building Olinto Land The building was subject to a $20,000 mortgage that was assumed by The Worthington Corp. What was The Worthington Corp.'s basis in the building? a. $60,000 b. $80,000 c. $144,000 d. $164,000 Adjusted Basis $80,000 10,000 Fair Market Value $164,000 96,000 Percentage of The Worthington Corp. Stock Acquired 60% 40%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Gearty and Olinto organized The
Worthington Corp., which issued voting
common stock with a fair market value of
$240,000. They each transferred property
in exchange for stock as follows:
Property
Gearty
Building
Olinto
Land
The building was subject to a $20,000
mortgage that was assumed by The
Worthington Corp. What was The
Worthington Corp.'s basis in the building?
a. $60,000
b. $80,000
c. $144,000
d. $164,000
Adjusted Basis
$80,000
10,000
Fair Market
Value
$164,000
96,000
Percentage
of The
Worthington
Corp. Stock
Acquired
60%
40%
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