J, L, and R formed a new corporation. J exchanged equipment worth $35,000 (basis $8,000) for 35% of the stock, and services worth $25,000 for 25% of the stock; L exchanged land worth $25,000 (basis $5,000) for 25% of the stock; and R received 15% of the stock in exchange for securities worth $15,000 (basis $10,000). Which of the following statements is true?

a. The transaction would not be eligible for nonrecognition because more than 20% of the stock received was in exchange for services.

b. The transaction will be eligible for nonrecognition, but J will have to recognize gain on the compensation for services.

c. Only the basis of the property transferred is considered in determining whether nonrecognition is granted; the three shareholders owned 80% of the property transferred.

d. None of the above