George and Brad together form the Odd Couple Corporation (Odd) on Jan. 1, 20x1. George transfers equipment (basis of $575,000 and fair market value of $600,000) to Odd in exchange for 50% of Odds stock and $100,000 of cash from the corporation. Brad transfers cash of $110,000, investment land (basis of $598,000 and fair market value of $338,000) and agrees to provide ordinary and necessary cleaning services to the corporation in exchange for 50% of Odds stock. The services provided by George are worth $52,000. Assume that Odd began business immediately after it was incorporated, and that Brad performed all of the required services between Jan. 2 and March 31.

A. Does Section 351 apply to the formation of Odd? Why or why not?

B. What is George's recognized gain/loss or income?

C. What is Brad's recognized gain/loss or income?

D. What is George's basis in the Odd stock?

E. What is Brad's basis in the Odd stock?