O.K. I'm using Becker 2011 and having trouble calculating the Corporation basis of the property contributed by Mitchell on the 2nd part of the simulation that I mentioned in the subject line. 

For everyone else, here are the facts:  Mitchell contributes property with a FMV of 80,000 / Adjusted Basis of 40,000 / Liability on it was 50,000 / and also contributes 20,000 CASH to the Corporation. 

The tax adjusted basis on the Corporation is 40,000 and I'm having trouble getting to this number. 

You're exactly right.  I figured it out earlier.  Because together (Cash of 20K + 40 basis) exceed the Liability of 50K there is no gain recognized.  Next, in figuring out the basis on the Corporation side the rule is to take the Greater of: 1) Adjusted Basis + Gain Recognized or 2) Liabilities assumed by Corp.      In this problem, to figure it out, the cash and the basis together are larger than the liability, so the Corp uses the 40K for the basis in the property and of course 20 for the cash. 

Thanks!