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Early in 2018, a calendar-year corporation engages your services to prepare its federal income tax...

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Accounting

Early in 2018, a calendar-year corporation engages your services to prepare its federal income tax return for 2017. It informs you that it was created and capitalized in (hopefully) a section 351 transaction employing only common stock. As you speak with the CFO, you learn the following with respect to the 4 participating shareholders:
Shareholder #1 received 5% of the stock in exchange for certain information in her custody related to the industry in which the corporation would be operating.
Shareholder #2 received 5% of the stock in exchange for his provision of legal organizational services
Shareholder #3 received 30% of the stock in exchange for raw land; 2/3 of that stock was sold by shareholders #3 immediately after the attempted section 351 transactions.
Shareholder #4 received 60% of the stock in exchange for cash.
Consider only the section 351 requirements of control and property
Why may section 351 treatment be in jeopardy? (do not analyze the situation here; do so later; here only state the basic concern(s))
To resolve this/these concerns(s), what questions do you need to ask with respect to :
Shareholder #1
Shareholder #3

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