Heather and Howie Form Hh Company

Question 58
Multiple Choice

Heather and Howie form HH Company.In exchange for 50% of the stock,Heather contributes cash of $7,000.For the remaining 50%,Howie contributes a truck with a FMV of $7,000 basis of $10,000).Which of the following statements is correct? A)The basis of the truck to HH Company is $7,000. B)Howie will report a loss of $3,000. C)Howie will have a basis in his stock of $10,000. D)All of the statements are correct.