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Abel, Iris, and Helga get together to form a new corporation. Abel contributes the land and building for their operations with basis of $140,000 and value of $220,000. Iris contributes managerial services worth $200,000 and $20,000 worth of office furniture and fixtures with basis of $3,000. Helga contributes $220,000 in cash. Each take 1,000 shares of stock in exchange for their contributions. Indicate what the true statements below.
A. Iris will be a part of the transferor group to determine if the transaction qualifies for §351 treatment.
B. This transaction does not qualify for §351 treatment
C. Helga will not recognize a gain whether or not §351 applies to this transfer.
D. Abel has a realized gain of $80,000
E. Iris must recognize compensation income of $220,000
F. All three shareholders will have the same amount of basis in their stock.
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