Becker CPA Review 4-8

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. $30,000

b. $30,500

c. $34,500

d. $40,500