C transfers $1,000 in uncollected customer accounts receivable from his cash basis service business to Z in exchange for half of Z's common stock plus Z's assumption of $500 of accounts payable attributable to the service business. C could have deducted the $500 upon payment in cash. D transfers $500 in cash to Z in exchange for the otehr half of Z's stock.

a The transaction is not covered by Section 351 because customer accounts receivable are not property.

b The transaction is covered by Section 351. There is no gain or loss to recognize. C's stock basis is zero and Z's property basis is zero.

c Section 351 applies. Hoewever, the $500 of accounts payable are liabilities in excess of basis so that gain so that gain must be recognized to that extent.

d None of the above