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What is Ron basis in the corporate stock received

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Question - Ron, David, and Mary formed Widget, Inc. Ron and David each received 40% of the stock, and Mary received the remaining 20%. Ron contributed land with an FMV of $70,000 and an adjusted basis of $20,000. The corporation also assumed a $30,000 liability on the property. David contributed land with an FMV of $30,000 and an adjusted basis of $15,000. David also contributed $10,000 in cash. Mary received her stock for services rendered. She would normally bill $20,000 for these services. What is Ron's basis in the corporate stock received?

a. $0

b. $20,000

c. $40,000

d. $70,000

Reference no: EM132631106

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