Bobbie, Inc. purchased the net assets of Draper Co. for $4,000,000 ($2,000,000 cash & $1,000,000 in Bobbie, Inc. stock) directly from Draper Co. At the time of the transaction, Draper Co. had total assets with a BV of $4,500,000 and a FMV of $4,000,000, and total liabilities with both a BV and FMV of $2,000,000. The amount of gain Draper Co. will recognize from this transaction is:

a)

$2,000,000

b)

$1,500,000

c)

$500,000

d)

$1,000,000