Hale Instruments, Inc., a C corporation, transferred its inventory to Agnes Acoustics, Inc., an S corporation, in a nonrecognition transaction. Agnes Acoustics took Hale Instruments' basis in the transferred inventory. Hale Instruments uses the last-in, first-out (LIFO) method to value its inventory. Before the transfer, the value of the corporation's inventory under the LIFO method was $135,000. The value of the corporation's inventory assets under the first-in, first-out (FIFO) method was $185,000. What amount, if any, has to be recognized, and by whom?