C borrows $250 from bank on a non-recourse loan with property as security. C then transfers the property to Z Corporancion, subject to the debt, in exchange for half of Z's stock, and D transfers $250 in cash to Z in exchange for the otehr half of Z's stock. Assume the propety has a fair market value of $500 prior to the borrowing and a basis of $200. Assume also that the borrowing does not have a tax avoidance purpose under 357(b). Finally, assume C also contributes hsi own note promising to pay Z $50

a The transaction does not qualify under Section 351

b The transaction qualifies undr Section 351. There is no gain or loss to recognize since no boot is received.

c Boot is received equal to the amount of the liability of $250 so that gain must be recognized to that extent.

d Boot is received to the extent of %50, the excess of the liability over the basis of the property. Gain must be recognized to that extent unless the C can successfully argue that this $50 note eliminates the boot.

e None of the above.

Which is the correct answer?