A and B, two individuals, formed X Corporation on May 5, 2009. On that date A contributed property with a fair market value (FMV) of $100 and an adjusted basis (AB) of $50 and

B contributed property with a FMV of $100 and an adjusted basis of $105 to X, each received 100 X shares in exchange. Three years later (on May 5, 2012), in a transaction unrelated transaction, C Corporation contributed property with a FMV of $150 and an AB of $156 to X and received 100 X shares in exchange and B contributed property with a Fair Market Value of $205 and an adjusted basis of $200 to X in exchange for 205 shares of X stock. (These are the only shares of X outstanding).

Which of the following statements is correct?

a) A will recognize $50 gain and take an adjusted basis of $100 in his or her 100 X shares.

b) B will recognize a $5 gain in 2012, and take an adjusted basis of $305 in the 305 X shares

received.

c) C will recognize a $6 loss and take an adjusted basis of $150 in its 100 X shares.

d) C will not recognize any gain or loss and will take an adjusted basis of $156 in its X shares.

e) Both b and d are correct.

f) None of a through e are correct.