7. Joe and Kay form Gull Corporation. Joe transfers property with a basis of $200,000 and a fair market value of $250,000 for 200 shares in Gull Corporation. Kay transfers property with a basis of $50,000 and fair market value of $240,000. She agrees to accept 200 shares in Gull Corporation for the property and for providing bookkeeping services to the corporation in its first year of operation. The value of Kays services is $10,000. With respect to the transfer: a. Neither Joe nor Kay recognizes gain or income on the exchanges. b. Kay has a recognized income of $10,000. c. Kay has recognized income of $20,000. d. Joe has a recognized gain of $50,000 and Kay has a recognized gain of $190,000.