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Dick, Bev and Mollie form Murphy Corporation. Dick transfers land worth $80,000 (adjusted basis is $25,000) for 80 shares, Mollie transfers $40,000 cash for 40 shares and Bev transfers equipment worth $40,000 (adjusted basis is $16,000) and $40,000 of services for 80 shares. Bev's tax consequences are:

A. $64,000 recognized gain; basis in 80 shares of $80,000

B. $40,000 recognized gain; basis in 80 shares of $56,000

C. $24,000 recognized gain; basis in 80 shares of $40,000

D. $0 recognized gain; basis in 80 shares of $16,000

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  • Reference No.:- M938921

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