Four Individuals Form Chickadee Corporation Under § 351 Both Jane and Walt Receive Stock in Chickadee Corporation Equal

Multiple Choice

Four individuals form Chickadee Corporation under § 351. Two of these individuals, Jane and Walt, made the following contributions: $\begin{array}{lrr}&&\text { Fair Market }\\&\text { Adjusted Basis }&\text {Value }\\\text { From Jane- } & \\\text { Cash } & \$ 360,000 & \$ 360,000\\\text { Patent } &-0- & 40,000 \\\text { From Walt- } & & \\\text { Equipment (depreciation claimed of } \$ 100,000) & 240,000 & 370,000\end{array}$
Both Jane and Walt receive stock in Chickadee Corporation equal to the value of their investments.

A) Jane must recognize income of $40,000; Walt has no income.
B) Neither Jane nor Walt recognize income.
C) Walt must recognize income of $130,000; Jane has no income.
D) Walt must recognize income of $100,000; Jane has no income.
E) None of the above.