C. Sean, a sole proprietor, is engaged in a service business (landscaping). In the current year, Sean incorporates his business by forming Cut Ur Grass Inc. CUGI). In exchange for (a) all of its stock (FMV $400,000) and (b) CUGI's note payable of $1,600,000, CUGI receives Sean's business assets (basis of $200,000 and fair market value of $2 million). Does Sean recognize any gain on the incorporation? Explain. What basis does Sean have in the Aqua stock? What basis does CUGI have in the assets it receives? a. b. c