40. (3 pts) Mr. A transferred equipment with an adjusted basis of $10,000 and a fair market value (FMV) of $27,500 to Corporation Z in an exchange for 90% of Z's stock and $5,000 in cash. At the time of transfer, the stock had a FMV of $22,500. What is the amount of gain recognized by Mr. A? a) $0 b) $ 2,500 c) $5,000 d) $17,500 e) None of the above