Cadence transfers property worth $500,000, basis of $100,000, to Alpha Corporation for 80% of the stock in Alpha, worth $400,000, and a long-term note, executed by Alpha Corporation and made payable to Cadence, worth $100,000.

Cadence recognizes a gain of $100,000 on the transfer.

None of the above

Cadence recognizes a gain of $400,000 on the transfer.

Cadence recognizes no gain on the transfer.

Cadence recognizes a gain of $300,000 on the transfer.