Question

Lisa transferred land worth $200,000, with a tax basis of $40,000, to PIE Corporation, an existing entity, for 800 shares of its stock. PIE Corporation has two other shareholders, Bill and Bob, each of whom holds 100 shares. With respect to the transfer:____.

A. Lisa has no realized gain.
B. Pie has a basis of $160,000 in the land.
C. Lisa has a basis of $200,000 in her 800 shares of Pie.
D. Lisa has a basis of $40,000 in her 800 shares of Pie.
E. None of the above.

Answer 1

C. Lisa has a basis of $200,000 in her 800 shares of Pie.

Step-by-step explanation:

As Lisa transferred the land worth for $200,000 to PIE corporation for 800 shares so it would be represent that LIsa has a baisis of $200,000 in her PIE 800 shares

Therefore as per the given situation the option c is correct

And, the rest of the options are wrong