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Dan Knight and Patricia Chen, who are good friends, form Crane Corporation. Dan transfers land (worth...

Dan Knight and Patricia Chen, who are good friends, form Crane Corporation. Dan transfers land (worth $200,000, basis of $60,000) for 50% of the stock in Crane. Patricia transfers machinery (worth $150,000, adjusted basis of $30,000) and provides services worth $50,000 for 50% of the stock. The services are required to be capitalized by Crane as organizational costs.

  1. Will the transfers qualify under § 351 (Yes or No)  ?
  2. What is the gain or income recognized by Dan  and Patricia ?
  3. What is the basis in the stock received by Dan  and Patricia ?
  4. What is Crane Corporation’s basis in the land  and the machinery ?
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