22. A shareholder's basis in stock received in a Sec. 351 transaction is

A) decreased by liabilities assumed by the corporation.

B) increased by the FMV of boot received from the corporation.

C) increased by the gain recognized by the corporation.

D) decreased by the gain recognized by the transferor.

23. Sabrina and Manny form a corporation in a transaction coming under Sec. 351. Sabrina transfers property with an adjusted basis of $125,000 and an FMV of $225,000 in exchange for one-half of the stock. The property has a $75,000 mortgage, which the corporation assumes. The corporation's basis in the property is

A) $75,000.

B) $125,000.

C) $150,000.

D) $225,000.

24. A new corporation may generally select one of the following accounting methods with the exception of

A) cash method.

B) accrual method.

C) hybrid method.

D) retail method.