Dick, a cash basis taxpayer, incorporates his sole proprietorship. He transfers the following items to the newly created Orange Corporation.

Adjusted Fair Market Basis Value

Cash $ 10,000 $ 10,000

Building 120,000 175,000

Mortgage payable (secured by the building and held for 15 years) 100,000 100,000

With respect to this transaction:

a. rick's basis in the orange stock is $30,000

b. rick has a recognized gain of $100,000

c. orange corporation's basis in the building is $175,000

d. rick has a recognized gain of $75,000