Cynthia, a sole proprietor, was engaged in a service business and reported her income on the cash basis. On February 2, 2016, she incorporates her business as Dove Corp and transfers the assets of the business to the corporation in return for all of the stock in addition to the corporations assumption of her proprietorships liabilities. Al of the receivables and the unpaid trade payables are transferred to the newly formed corporation. The balance sheet of the corporation immediately after its formation is as follows.

Assets
	Basis to Dove	Faair Market Value
Cash	$ 80,000.00	$ 80,000.00
AR	$ -	$ 240,000.00
Equipment	$ 120,000.00	$ 320,000.00
Building	$ 160,000.00	$ 400,000.00
Land	$ 40,000.00	$ 160,000.00
Total	$ 400,000.00	$ 1,200,000.00
Liabilities and Stockholders Equity
Liabilities:
AP	$ 120,000.00
NP	$ 360,000.00
Stockholder equity:
Common Stock	$ 720,000.00
Total	$ 1,200,000.00

Discuss the tax consequences of the incorporation of the business to Cynthia and to Dove Corp.