Kelsey contributed a building with a fair market value of $250,000 and an adjusted tax basis of $100,000 in return for 200 shares of Kars Inc and $50,000 cash. Stephanie contributed land with a fair market value of $225,000 and a basis of $250,000 in exchange for 200 shares of MRHS, Inc. Note: the building Ron contributed is subject to a $25,000 mortgage, which MRHS, Inc. assumed. The mortgage was taken on the building 8 months before the transfer.