Ralph and Peter form Sparrow, a C Corporation, with the following investments. Ralph transfers machinery (basis of $140,000 and fair market value of $200,000), while Peter transfers land (basis of $120,000 and fair market value of $190,000) and services rendered (worth $10,000) in organizing the corporation. Each shareholder is issued 25 shares in Sparrow Corporation representing 50% ownership for each of them. With respect to the transfers:

a.) Ralph has no recognized gain; Peter recognizes income of $10,000.

b.) Neither Ralph nor Peter has recognized gain or income on the transfers.

c.) Sparrow Corporation has a basis of $130,000 in the land transferred by Peter.

d.) Peter has a basis of $120,000 in the 25 shares he acquires in Sparrow Corporation.