Zapco Corporation has 100 shares of common stock outstanding, all of which are owned by Sam Shifty. Zapco has a broad offering of current and retained earnings and earnings.

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

(b) What result if Sam Shifty and Selma Zap, who is not related to Sam, own Zapco equally (50 shares each), and the two shareholders form Holding Co. by transferring all of their Zapco shares and Sam gets back 100 shares of Holding?