In order to induce North corporation to build a new football stadium in Irwindale , California , the City of Irwindale donates land ( fair market value of $750000) and cash of $1000000 to the corporation. Within several months of the donation, North corporation spends $3500000 on the construction of a new stadium located on the land. North corp. used the $100000 cash to help pay for the construction of the stadium. Which of the following statements is correct?

a) North Corporation must recognize income of $1,750,000 for the donation.

b) North Corporation will have a zero basis in the land and a basis of $3500000 in the stadium.

c) North Corporation will have a zero basis in the land and a basis of $2,500,000 in the stadium.

d) North Corporation must recognize income of $750000 for the donation

e) None of the above