Assume the same facts as in Problem 2-55.
In problem 2-55
On June 3 of the current year, Eric, Florence, and George form Wildcat Corporation and transfer the following items:
Item Transferred

Eric purchased the land (a capital asset) five years ago for $200,000. Florence purchased the equipment three years ago for $48,000. The equipment has been fully depreciated.
a. Under what circumstances is the tax result in Problem 2-55 beneficial, and for which shareholders? Are the shareholders likely to be pleased with the result?
b. If the shareholders decide that meeting the Sec. 351 requirements would generate a greater tax benefit, how might they proceed?

Transferor Asset Basis to Transferor FMV Number of Common Shares Issued 550,000 500 25,000 250 25,000 250 Eric Land S200,000 Florence Equipment 0- |+ George Legal services-0