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Ramona and Hermione formed Wiley Corporation on January 2 . Ramona contributed cash of $ 2 7 5 , 0 0 0 in return for

Ramona and Hermione formed Wiley Corporation on January 2. Ramona contributed cash of $275,000 in return for 50 percent of the corporations stock. Hermione contributed a building and land with the following fair market values and adjusted tax bases in return for 50 percent of the corporations stock:
FMV Adjusted Tax Basis
Building $ 103,125 $ 27,500
Land 240,625110,000
Total $ 343,750 $ 137,500
To equalize the exchange, Wiley Corporation paid Hermione $68,750 in addition to her stock.
f. Assume Hermione's adjusted tax basis in the land was $275,000.

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