T Corp ("T") has a property with a fair market value of $100 and basis of $50. T is wholly owned by Abby (basis in stock: $20). On January 3 of year 1, P Corp ("P") and T signed a binding contract pursuant to which T will be merged with and into P on June 1 of year 1 under the applicable state corporate laws. Pursuant to the contract, the T shareholder will receive a $100 short-term note.

On January 2 of year 1, the value of the P stock is $1 per share. On June 1 of year 1, T merges with and into P pursuant to the terms of the contract. On that date, the value of the P stock is $.25 per share.

After the merger, P Corp retained T Corp's assets for P Corp's business.

a) What's the tax treatment to T?

b) What's the tax treatment to Abby?

c) What's the tax treatment to P?