ones, Smith, and Black formed a corporation with authorized voting common stock of $200,000. Jones received 20% of the capital stock as payment for $40,000 of legal services performed related to the corporation's organization. Smith and Black transferred property in exchange for stock as follows:

	Adjusted basis	FMV	Percentage of stock acquired
Smith	$15,000	$20,000	10%
Black	90,000	140,000	70%

What is each shareholder's basis in the stock received?

Jones

Smith

Black

A.

$0

$15,000

$90,000

B.

$0

$40,000

$140,000

C.

$40,000

$15,000

$90,000

D.

$40,000

$20,000

$140,000