Cheryl transfers property worth $275,000, basis of $100,000, to Frank Corporation for 80% of the stock in Frank, worth $150,000, and a long-term note, executed by Frank Corporation and made payable to Cheryl, worth $125,000.

a. Cheryl recognizes a gain of $150,000 on the transfer.

b. Cheryl recognizes no gain on the transfer.

c. Cheryl recognizes a gain of $125,000 on the transfer.

d. None of the above.