Abbot and Tommy form Pubba Inc., a C-Corporation. Abbot transfers land (FMV $10,000 and adjusted basis of $3,000) and agrees to provide legal services to help organize the entity worth $230,000 for 50% of the stock in the corporation. Tommy transfers equipment (FMV $240,000 adjusted basis of $75,000 for 50% of the stock in the corporation. The value of the stock received is $240,000 for each Abbot and Tommy. (9 points)

a) Will the transfer qualify under 351 as a tax free transfer? Explain.

b) What are the tax consequences to Abbot and Tommy including the basis in the stock they received?

c) What is Pubba Inc.s basis in the land and equipment received?

d) Would your answers change to questions a and b if Abbots land had FMV of $40,000 instead?