Jordan and Ava form Club Corporation with the following assets:

........................................................................................From Jordan ...........From Ava

Cash...................................................................................$900,000

Building (basis of $300,000, FMV of...............................................................$390,000

$400,000) - Ava gets $10,000 cash

Land (basis of $200,000, FMV of $500,000)...................................................$500,000

Club issues stock equally to Jordan and Ava. One of the tax consequences of these transfers is:

a.Ava has a recognized loss on the building of $100,000

b. Club has a basis in the building of $310,000.

c.Ava has a basis in the Club stock of $890,000.

d.Ava has a recognized gain on land of $300,000 but no recognized loss on the building.

e.None of these.