Zeppo and Harpo Are Equal Owners of the Marx Corporation

Multiple Choice

Zeppo and Harpo are equal owners of the Marx Corporation. During the current year, they agree to admit Groucho as a shareholder. Groucho will contribute $25,000 in cash and property worth $50,000 (adjusted basis of $35,000) for 25% of Marx Corporation's stock. What is Groucho's basis in the Marx Corporation stock?

A) $45,000
B) $50,000
C) $60,000
D) $75,000
E) $90,000