Frank plans to transfer all existing business assets and liabilities to a newly incorporated entity, Bearden's Specialty Produce, Inc. (Produce), in exchange for 1,000 shares of voting common stock. He will serve as President of the corporation, and he will be a member of the Board of Directors. Frank wants to adopt an August 31 fiscal year end for Produce because August tends to be the slowest month of the year for the business, and accounts receivable typically are at their lowest level. Frank also intends for Produce to continue to use the cash method of accounting. Frank's close friend, Maria Garcia, has for some time been interested in buying into Frank's business. Maria will not have access to the cash necessary for this acquisition until October, so Frank has agreed to proceed with the incorporation, and then sell 400 of his new Produce shares for $75,000 to Maria sometime before the end of the current year. In discussing the proposed incorporation with you, Frank specifically asks about the amount of any gain he must recognize, both upon the incorporation itself, and upon the subsequent stock sale. Naturally, he is eager to minimize any recognized gain to the extent possible. Frank also wants to structure the transaction to achieve the best tax outcome for Garcia, as Frank is eager to have her as a business associate. In addition to addressing these specific concerns, identify any potential tax problems or planning ideas suggested by the facts. Be specific in describing the issues involved, give full citations to controlling law, and provide suggestions and/or alternatives to minimize risks and maximize opportunities