Question: A contributes appreciated property worth $80, with an adjusted basis of $60, to newly formed X and in exchange for all the 80 outstanding shares

A contributes appreciated property worth $80, with an adjusted basis of $60, to newly formed X and in exchange for all the 80 outstanding shares of X. Immediately thereafter, A gives 20 shares to B, A's employee, in payment of accrued wages. Does 351(a) apply to A's exchange of property for stock? How much gross income must A and B recognize, if any?

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