Darren, Bev and Mollie form Murphy Corporation. Darren transfers land worth $80,000 (adjusted basis is $25,000) for 80 shares, Mollie transfers $40,000 cash for 40 shares and Bev transfers equipment worth $40,000 (adjusted basis is $16,000) and $40,000 of services for 80 shares. Bev's tax consequences are:

Gain/income recognized $40,000 Stock basis: $56,000

Gain/income recognized $24,000 Stock basis: $40,000

Gain/income recognized $64,000 Stock basis: $80,000

Gain/income recognized $0 Stock basis: $16,000