Leo transfers equipment with a basis of $40,000 and a fair market value of $100,000 for additional stock in Green Corporation. After the transfer, Leo owns 80% of the stock. Leo had claimed depreciation on the equipment, prior to transferring it to Green Corporation in the amount of $50.000. With respect to the transfer: 1-Leo has no recognized gain and no accelerated cost recovery to recapture. 2- Green Corporation has a basis of $40.000 in the equipment, but it will have no depreciation recapture if it later disposes of the equipment in a taxable transaction. 3- Leo has ordinary income of $50,000 when it receives the property from Leo. 4-Green Corporation has ordinary income of $50,000.