Mark is a radiologist and maintains a radiology practice (X-ray). Jennifer is an Information Systems Specialist and has created a computer program for the administration and operation of radiology offices. Both have decided to join to create the X-Rays Software Corp. (hereinafter X-Rays). The corporation, for profit, was organized under the laws of its state of organization on January 2, 2018. X-Rays made the election of Corporation S after complying with all the requirements established in the Federal Internal Revenue Code.

Mark and Jennifer each receive 100 common shares of X-Rays by contributing the following assets to the new corporation

STOCKHOLDER PROPERTIES

MARK TAX BASIS MARKET VALUE

Building $100,000 $275,000

Equipment 75,000 50,000

Cash 50,000 50,000

Mortgage (debt) 25,000 25,000

$400,000

JENNIFER

Computer program 20,000 200,000

License 5,000 100,000

Cash 50,000 50,000

$350,000

The mortgage note was assumed by Mark in the sale of the building. The promissory note does not require payments to amortize the principal until January 1, 2022.

1) What is Mark's initial stock basis?

2) What is Jennifer's inital stock basis?

3) What is the inital basis of all the assets received by X-ray?