Zapco Corporation has 100 shares of common stock outstanding all of which are owned by Sam Shifty. Zapco has an ample supply of current and accumulated earnings and profits.

(a) If Same forms Holding Co. by transferring 50 Zapco shares in exchange for 100 shares of Holding common stock and 100 shares of Holding preferred stock, will any of the Holding shares be Section 306 stock?

(b) What result if Zapco were owned equally (50 shares each) by Sam Shifty and Selma Zap, who is unrelated to Sam, and the two shareholders form Holding Co. by transferring all their Zapco stock with Sam taking back 100 shares of Holding Co. common stock and Selma taking back 50 shares of Holding Co. preferred stock and 50 shares of Holding Co. common stock?