1. Bob owns all 50 shares of Max Company, valued at $50,000. His friend, Lee, owns equipment worth $50,000. Lee's adjusted basis in the equipment is $20,000. Lee transfers the equipment to Max Company in exchange for 50 shares. Lee has a: (3 Pt) (Please show your computation)

a. $30,000 realized and $30,000 recognized gain

b. $30,000 realized and $0 recognized gain

c. $0 realized and $0 recognized gain

d. none of these