Dan and Patricia form Crane Corporation. Dan transfers land (worth $200,000, basis of $60,000) for 50% of the stock in Crane. Patricia transfers machinery (worth $150,000, adjusted basis of $30,000) and provides services worth ($50,000) for 50% of the stock.

a. Will the transfers qualify under 351? Explain.

b. What are the tax consequences to Dan and Patricia?

c. What is Crane Corporations basis in the land and the machinery?