Loonis Inc

Multiple Choice

Loonis Inc.and Rhea Company formed LooNR Inc.by transferring business assets in exchange for 1,000 shares of LooNR common stock.Loonis transferred assets with a $820,000 FMV and a $444,000 adjusted tax basis and received 820 shares.Rhea transferred assets with a $180,000 FMV and a $75,000 adjusted tax basis and received 180 shares.Determine Loonis and Rhea's tax basis in their LooNR stock and LooNR's aggregate tax basis in the transferred assets.

A) Loonis' basis is $444,000; Rhea's basis is $75,000; LooNR's basis is $1 million.
B) Loonis' basis is $444,000; Rhea's basis is $180,000; LooNR's basis is $1 million.
C) Loonis' basis is $444,000; Rhea's basis is $180,000; LooNR's basis is $624,000.
D) None of the above