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What amount of gain did Carr recognize from this transaction

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Problem - Adams, Beck, and Carr organized Flexo Corp. with authorized voting common stock of $100,000. Adams received 10% of the capital stock in payment for the organizational services that he rendered for the benefit of the newly formed corporation. Adams did not contribute property to Flexo and was under no obligation to be paid by Beck or Carr. Beck and Carr transferred property in exchange for stock as follows:

Adjusted Basis

Fair Market Value

Percentage of Flexo Stock Acquired

Beck

$ 5,000

$20,000

20%

Carr

60,000

70,000

70%

Required - What amount of gain did Carr recognize from this transaction?

a. $40,000

b. $15,000

c. $10,000

d. $0

Reference no: EM132631121

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