Amber, the sole property transferor, must acquire at least 80% of the stock issued by the new corporation in order for the transaction to qualify for tax-deferred treatment under § 351. Otherwise, she will recognize $325,000 of taxable gain as a result of the transfer. Even if the requirement of § 351 are met, any corporate debt issued by the corporation will be treated as boot and will result in at least some gain recognition to Amber. Therefore, she must evaluate the cost of recognizing gain now versus the benefit of the corporation obtaining an interest deduction later. Describe which strategy you would recommend to Amber and justify your answer:

• Have Jimmy transfer some property along with the services rendered to the corporation.
• Instead of having the corporation issue debt on formation, Amber should withhold certain assets. For example, she could withhold the building and let the corporation lease the it.
• Have Amber not transfer the cash basis receivables to the corporation.
• Transfer to the corporation any accounts payable outstanding held by Amber's sole proprietorship.