Carl transfers land with a fair market value of $120,000 and basis of $30,000, to a new corporation in exchange for 85 percent of the corporation’s stock. The land is subject to a $40,000 liability, which the corporation assumes. What amount of gain must Carl recognize as a result of this transaction?

a. $0
b. $40,000
c. $30,000
d. $10,000
e. None of the above