FACTS: Jack and Jill form a C corporation called "Up The Hill" (UTH) specializing in manufacturing and selling anti-rolling equipment.

Jack transfers equipment with FMV: $500,000; AB: $100,000 in exchange for 50% of the 10,000 shares of common stock of UTH.

Jill transfers accounting services w/ FMV of $100,000 and equipment with FMV: $300,000; AB: $150,000; mortgage of $100,000 that will be assumed by UTH; and cash of $100,000 in exchange for 50% of the 10,000 shares of common stock of UTH.

1.Is this transaction a qualified Sec. 351? Why?

2.How does Jack report this transaction?

3.What is his basis in his UTH stock?

4.How does Jill report this transaction?

5.What is Jill's basis in her UTH stock?

6.What is UTH's basis in Jack's equipment?

7.What is UTH's basis in Jill's equipment?