Harry forms the Nectarine Corporation during the current tax year. To form the corporation, Harry transfers assets having a fair market value of $650,000 to Nectarine Corporation for 100 percent of the corporation's stock. Harry's adjusted basis in the assets transferred was $375,000 and Nectarine Corporation assumed a $200,000 mortgage on the assets. If the fair market value of the stock

received by Harry is $450,000, what is his basis in the stock received from the corporation?
a. $175,000
b. $200,000
c. $375,000
d. $450,000
e. None of the above


a

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