C and D jointly organized Z. C leases real property to Z for 40 years, receiving $500 in cash and half of Zs stock. D transfers $500 in cash to Z in exchange for the other half of Zs stock.

Group of answer choices

a. This is a good Section 351 transaction. Z takes a $500 basis in the lease amortizable over 40 years.

b. This is simply a lease of property by C to Z with C being paid in cash and stock. Cs income is $500 plus the fair market value of the stock.

c. Neither of the above.