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1. Gearty and Olinto organized The Worthington Corp., which issued voting common

stock with a fair market value of $240,000. They each transferred property in

exchange for stock as follows:

Property

Adjusted Basis

Fair Market Value

Percentage of The Worthington

Corp. Stock Acquired

Gearty Building

$80,000

$164,000

60%

Olinto Land

10,000

96,000

40%

The building was subject to a $20,000 mortgage that was assumed by The

Worthington Corp. What was The Worthington Corp.'s basis in the building?

a. $60,000

b. $80,000

c. $144,000

d. $104,000