28. LO.2, 3 Rasa and Jane form Osprey Corporation. Rasa transfers property, basis of

$25,000 and fair market value of $200,000, for 50 shares in Osprey Corporation.

Jane transfers property, basis of $50,000 and fair market value of $165,000, and agrees to serve as manager of Osprey for one year; in return, Jane receives 50 shares in Osprey. The value of Jane’s services to Osprey is $35,000.

a. What gain or income will Rasa and Jane recognize on the exchange?

b. What basis will Osprey Corporation have in the property transferred by Rasa and Jane? How should Osprey treat the value of the services that Jane renders?