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:

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

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Fair Market Value Percentage of The Worthington Corp. Stock Acquired Adjusted Basis Property Building Land 60% 40% Gearty $80,000 $164,000 96,000 Olinto 10,000