John and Flora form Hope Corporation. John transfers property with a basis of $300,000 and fair market value of $1,700,000 for 50 shares in Hope Corporation. Flora transfers property with a basis of $90,000 and fair market value of $1,580,000, and agrees to serve as manager of Hope for one year. In return Flora receives 50 shares of Hope. The value of Flora's services is $120,000. With respect to the transfers please choose the statement that is true: 0 Hope Corporation has a basis of $1,580,000 in the property it received from Flora. 0 John will recognize a gain of $1,400,000. 0 Flora will not recognize gain or income upon the transfer of property and services. 0 None of the above