During formation of Beecky partnership, Sam contributed property with an adjusted basis of $130,000 in exchange for a 25% interest in Beecky. The fair market value of the contributed property was $170,000, and the property was encumbered by a mortgage with a balance of $120,000. What amount of gain should Sam recognize from contributing the property into Beecky partnership?

a. $50,000

b. $40,000

c. $10,000

d. $0