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Question 1: Louis exchanges property having an $19,000 adjusted basis and a $37,000 fair market...

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Accounting

Question 1: Louis exchanges property having an $19,000 adjusted basis and a $37,000 fair market value for 70 shares of the newly created Dog Corporation stock. Ann exchanges legal services worth $16,000 for the remaining 30 shares of Dog Corporation's stock, which of the following is true?
a) Ann recognizes no income, and the exchange is nontaxable.
b) Ann must recognize $16,000 of income but Louis's transfer of property qualifies under IRC Sec. 351 as nontaxable.
c) Ann must recognize $16,000 of income and Louis must recognize $18,000 gain on the exchange.
d) The exchange qualifies as a nontaxable exchange under IRC Sec. 351.
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