Boss Corporation ("Boss") was formed in 2017. In 2020, Julio transfers land with a basis of $43,000 and a fair market value of $87,000 to Boss in exchange for 85% of the stock of Boss plus a promissory note in the amount of $12,000. Boss also agrees to assume the original mortgage on the land (acquired 10 years ago) in the amount of $50,000. With respect to the transfer:

Select one:

a.

Julio will have a recognized gain on the transfer of $12,000.

b.

Julio will have no recognized gain on the transfer.

c.

Boss Corporation will have a basis of $62,000 in the land transferred by Julio.

d.

Boss Corporation will have a basis of $50,000 in the land transferred by Julio.

e.

None of these.