ABC Corporation acquired 100 percent of the stock of GAP, Inc. for $500,000 in one transaction and immediately made a Code Sec. 338 election to treat the acquisition as an asset purchase. GAPs tangible assets were worth $450,000, had a basis of $300,000 and earnings and profits were $100,000. Which of the following statements is incorrect?

a. GAP is subject to the recapture of cost recovery deductions on a deemed sale of its assets.

b. GAP will have a basis in its assets of $300,000.

c. GAP may file consolidated returns with ABC after the Code Sec. 338 election becomes effective.

d. GAP may be subject to ITC recapture on the deemed sale of its assets.