1. Tara incorporates her sole proprietorship, transferring it to newly formed Black Corporation. The assets transferred have an adjusted basis of $240,000 and a fair market value of $300,000. Also transferred was $10,000 in liabilities, $1,000 of which was personal and the balance being business related. In return for these transfers, Tara receives all of the stock in Black Corporation.

1. Black Corporation will have a basis of $250,000 in the property.
2. Black Corporation will have a basis of $240,000 in the property.
3. Taras basis in the Black Corporation stock will be $241,000.
4. Taras basis in the Black Corporation stock will be $250,000.