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 $402,500. Julian's tax basis in the Lemon stock was $805,000. What amount of loss does Julian recognize in the exchange and what is his basis in the Apricot stock he receives?

A. No loss recognized and a basis in Apricot stock of $805,000.

B.$402,500 loss recognized and a basis in Apricot stock of $402,500.

C.No loss recognized and a basis in Apricot stock of $402,500.

D. $402,500 loss recognized and a basis in Apricot stock of $805,000.