Julian transferred 100 percent of his stock in Lemon Company to Apricot Corporation in a Type B stock-for-stock exchange. In exchange, he received stock in Apricot with a fair market value of $205,000. Julian's tax basis in the Lemon stock was $410,000. What amount of loss does Julian recognize in the exchange and what is his basis in the Apricot stock he receives?

Group of answer choices

$205,000 loss recognized and a basis in Apricot stock of $205,000

No loss recognized and a basis in Apricot stock of $410,000

$205,000 loss recognized and a basis in Apricot stock of $410,000

No loss recognized and a basis in Apricot stock of $205,000