Ann and Bob form Robin Corporation. Ann transfers property worth $420,000 (basis of $150,000) for 70 shares in Robin Corporation. Bob receives 30 shares for property worth $165,000 (basis of $30,000) and for legal ser-

vices (worth $15,000) in organizing the corporation.

1. What gain or income, if any, will the parties recognize on the transfer?

2. What basis do Ann and Bob have in the Robin Corporation stock?

3. What is Robin Corporations basis in the property and services it received from

   Ann and Bob? why do Ann and Bob receive Section 351 treatment? Aren't they have less than 80% of voting shares each person?