Gearty and Olinto organized The Worthington Corp., which issued voting common stock with a fair market value of $240,000. They each transferred property in exchange for stock as follows: Property Adjusted Fair Market Percentage of The Worthington
Basis Value Corp. Stock Acquired
Gearty Building $80,000 $164,000 60%
Olinto Land 10,000 96,000 40%
The building was subject to a $20,000 mortgage that was assumed by The Worthington Corp. What was The Worthington Corp.'s basis in the building?

$80,000.

Explanation:

From the given question:

Gearty and Olinto organized The Worthington Corp., which issued voting common stock with a fair market value of $240,000.

They each transferred property in exchange for stock as follows:

                  Property        Adjusted       Fair Market       Percentage of The                

                                          Basis             Value               Worthington   Corp.

                                                                                         Stock Acquired

Gearty         Building          $80,000       $164,000        60%

Olinto          Land                10,000         96,000                  40%

The building was subject to a $20,000 mortgage that was assumed by The Worthington Corp.

What was The Worthington Corp.'s basis in the building?

From the above given information;

Gearty and Olinto usually issued voting common stock which will be later exchange for property.

Now;

Under section 351 ; the issuance of common stock in exchange for property that is less than 80% of all the contributors is a taxable transaction.

Thus; as Gearty and Olinto who organized The Worthington Corp. altogether have more than 80% control (i.e 100%), this is a non taxable transaction and the basis of the corporation is the carryover basis.

Therefore;

Worthington Corp.'s basis in the building = Carryover basis = $80,000.

if you use only 25 for your entertainment and only 200 for the groceries that you really need and take out the 50 per month for the computer then that should be enough

answer; ///hong kong;