Kate and David form Blue Corporation. Kate transfers equipment worth $950,000 (basis of $200,000) and $50,000 cash to Blue Corporation for 50% of its stock. David transfers a building and land worth $1,050,000 (basis of $400,000) for 50% of Blue's stock and $50,000 cash. Which happens as a result of these transfers?

A: Kate recognizes no gain, and David recognizes gain of $50,000. B: Kate recognizes gain of $50,000, and David has no gain. C: Neither Kate nor David recognizes gain. D: Kate recognizes gain of $750,000, and David recognizes gain of $650,000. E:None of the above