18. Kinza and Lebron form Prince Corporation. Kinza transfers land that is Sec. 1231 property, with an half of the Prince Corporation stock. Lebron transfers equipment that originally costs $28,000 on which he has taken $5,000 in depreciation deductions. The equipment has an FMV of $25,000 and he receives one-half of the stock and a $5,000 short-term note. The transaction meets the requirements of Sec. 351. Which statement below is correct? A) There is no recognized gain or loss. B) Kinza recognizes a $2,000 Sec. 1231 gain and Lebron recognizes $5,000 as ordinary adjusted basis of $18,000 and an FMV of $20,000 in exchange for one- income. C) Kinza recognizes a $2,000 Sec. 1231 gain and Lebron recognizes a $5,000 Sec. 1231 gain D) Kinza recognizes no gain and Lebron recognizes $2,000 as ordinary income. 19. Shaquille transfers two assets to a newly-created corporation. The first asset has an adjusted basis of $40,000 and an FMV of $50,000. The second asset has an adjusted basis of $35,000 and an FMV of $25,000. Shaquille receives stock with an FMV of $66,000 and $9,000 cash. Shaquille must recognize a gain of A) $4,000 B) $5,000 C) $6,000. D) $7,000. 20. Chan transfers property with an Wallis Corporation in a Sec. 351 transaction. Chan receives stock worth $60,000 and a short-term note having a $10,000 FMV. Chan's basis in the stock is A) $60,000. B) $65,000 adjusted basis of $65,000 and an FMV of $70,000 to C) $70,000. D) $75,000 21. Rhiana transfers land with a basis of $40,000 to Styx Corporation in exchange for 100% of Styx's stock. At the date of the transfer, the land had a $30,000 fair market value. Absent an election by Rhiana, Styx's basis in the land is A) $30,000. B) $35,000. C) $40,000. D) $70,000