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 $240,000. Julian's tax basis in the Lemon stock was $480,000. What amount of loss does Julian recognize in the exchange and what is his basis in the Apricot stock he receives?

• $240,000 loss recognized and a basis in Apricot stock of $240,000.

• No loss recognized and a basis in Apricot stock of $480,000.

• $240,000 loss recognized and a basis in Apricot stock of $480,000.

• No loss recognized and a basis in Apricot stock of $240,000.