C owns all of the stock of Z Corporation, which is worth $1 million. Z wants to acquire land worth $75,000 from D. C proposes to transfer $1.00 of cash to Z at the same time D transfers the land to Z. Each C and D will receive stock.

a.

This is not a good Section 351 transaction. D could recognize loss and Z Corporation will take a higher carry-over basis from D.

b.

This is a good Section 351 transaction since C is transferring de minimus amount of property per regulation 1.351(a)(1)(ii).

c.

Neither of the above.