In a transaction qualifying under § 351, Karen transfers the following assets to Kramer Corporation in exchange for all of its stock: equipment (basis $200,000; fair market value $150,000) and land with (basis $65,000; fair market value $80,000). No special elections are made.

What is Kramer Corporation's basis in the equipment?


Santiago transfers real estate with an adjusted basis of $400,000 and fair market value of $550,000 to the newly formed Star Corporation in exchange for 100% of its stock. The corporation assumes the liability on the transferred real estate in the amount of $425,000.

What is Santiago's basis for his stock?