Kirby and Helen form Red Corporation. Kirby transfers property, the basis of $20,000 and a value of $300,000, for 100 shares in Red Corporation. Helen transfers property, the basis of $40,000 and a value of $280,000, and provides legal services in organizing the corporation. The value of her services is $20,000. In return, Helen receives 100 shares in Red Corporation. With respect to the transfers:
a. Kirby will recognize gain.
b. Helen will not recognize any gain or income.
c. Red Corporation will have a basis of $280,000 in the property it acquired from Helen.
d. Red will have a business deduction of $20,000.
e. None of the above
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