1- The Nandina Corporation was formed and began operations on July 1, 2016, and incurred the following expenses during the year:

State fees for incorporation	$ 800
Legal and accounting fees incident to organization	1,700
Legal fees for the issuance of stock	600
Temporary directors' fees	1,100

If the corporation chooses not to expense but rather amortizes organizational costs over 180 months, what is the amount of its amortization expense for 2016?

a.$20

b.$120

c.$3,600

d.$240

e.None of these choices are correct.

2- Terry forms the Camphor Corporation during the current year. She transfers property with a value of $700,000 to Camphor Corporation in exchange for 100 percent of the stock in the corporation. Terry's basis in the property transferred was $400,000 and the corporation assumed a $275,000 mortgage on the property. If the fair market value of the stock received by Terry is $450,000, what is the corporation's basis in the property received from Terry?

a.$450,000

b.$700,000

c.$400,000

d.$275,000

e.$125,000