Evans stock and the corporations real estate

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Evan is the sole shareholder of Corporation. Evan transferred real estate to Corporation in exchange for all of the stock of Corporation. The real estate was a capital asset in Evan’s hands and will also be a capital asset when held by the corporation. Evan’s basis in the real estate was $10,000 and the value of the real estate was $8,000 on the date of the transfer. If Evan received $2,000 in cash and 100 shares of stock from the corporation in exchange for the real estate, the resulting bases for Evan’s stock and the corporations real estate are:

A. Evan’s stock basis is $8,000; Corporation’s basis in the real estate is $8,000

B. Evan’s stock basis is $10,000; Corporation’s basis in the real estate is $10,000

C. Evan’s stock basis is $10,000; Corporation’s basis in the real estate is $8,000

D. Evan’s stock basis is $6,000; Corporation’s basis in the real estate is $12,000

Reference no: EM131286831

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