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Ken and Jim agree to go into business together selling old comic books and records. According to the agreement, Ken will contribute inventory valued at
Ken and Jim agree to go into business together selling old comic books and records. According to the agreement, Ken will contribute inventory valued at $200,000 in return for 80 percent of the stock in the corporation. Ken's tax basis in the inventory is $100,000. Jim will receive 20 percent of the stock in return for providing accounting services to the corporation (these qualify as organizational expenditures.) The accounting services are valued at $50,000. What is Jim's tax basis in the stock he recieves in return for his contribution of services to the corporation
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