Two individuals, Frank and Sam, form a new corporation. The following transactions are made pursuant to agreement of incorporation. In exchange for 2/3 (66.67 percent) of the stock in the newly formed corporation, Frank contributes: Furniture and Fixtures with an adjusted basis of $25,000 and an FMV of $50,000, and Land with an adjusted basis of $25,000 and an FMV of $50,000. In exchange for 1/3 (33.33 percent) of the stock in the newly formed corporation, Sam contributes services performed with an FMV of $50,000 Based upon the above information: 1. Does IRC 351 apply to these transactions? 2. What, if any, effect does the formation of this corporation have on Frank and Sam? 3. What is Frank's basis in the stock of the new corporation? 4. What is Sam's basis in the stock of the new corporation?