Marylou transfers $220,000 of equipment (basis = $170,000) to her wholly owned corporation in exchange for all

Question:

Marylou transfers $220,000 of equipment (basis = $170,000) to her wholly owned corporation in exchange for all the authorized nonvoting stock and $20,000 cash. How much gain or loss does Marylou recognize on the transfer, and what is her basis in the stock?
a. Gain = 0; basis = $150,000
b. Gain = $20,000; basis = $150,000
c. Gain = $20,000; basis = $170,000
d. Gain = $50,000; basis = $220,000

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...

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