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Determine the initial basis amounts for hester

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Hester Corporation purchases a building by giving stock with a fair market value of $28,300 (original cost was $21,100) and borrowing $204,100.

Hester pays closing costs of $8,000 on the purchase. For property tax purposes, the land is assessed at $8,400 and the building at $33,600. Before buying the property, Hester hires an independent appraiser and receives appraisals of $27,000 on the land and $273,000 on the building.

Determine the initial basis amounts for Hester using the assessed property values and the appraised values.

Reference no: EM132316351

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