Mike transfers investment real property with a fair market value of $500,000 to Golf Corporation in exchange for 100% of the corporations stock. Mike purchased the real property five years ago for $100,000. One day prior to the transfer of real property to the Corporation, Mike entered into a written legally binding agreement with Frank to sell Frank 50% of Golf Corporation stock for $250,000. Mike contributed the property to Golf and then immediately thereafter sold 50% of Golf to Frank.

Does the transaction qualify for Section 351 nonrecognition? Specifically explain and analyze any and all income tax consequences to Mike of the transaction. Calculate the amount and character of the gain or loss, if any, to Mike, including basis in his Golf stock. Support your analysis with authority from the tax code and other tax law, as applicable.