Cannon and Bruno form Lemon Corporation. Cannon transfers property (basis of $365,000 and fair market value of $300,000) while Bruno transfers land (basis of $80,000 and fair market value of $290,000) and $10,000 in cash. Each receives 50% of Lemon Corporations stock, which is worth a total of $600,000. As a result of these transfers:

(Give an explanation for your answer)

a.Cannon has a recognized loss of $65,000, and Bruno has a recognized gain of $210,000.

b.Neither Cannon nor Bruno has any recognized gain or loss.

c.Cannon has no recognized loss, but Bruno has a recognized gain of $210,000.

d.Lemon Corporation will have a basis in the land of $290,000.

e.None of the above.