On June 1, 2016, Nigel sells land (basis $55,000) to his son Ted for $40,000, the lands fair market value on the date of the sale. On September 21, 2016, Ted sells the land to an unrelated party. Which of the following statements is correct?

a. If Ted sells the land for $45,000, he has a $5,000 recognized gain on the sale.

b. If Ted sells the land for $35,000, he has a $20,000 recognized loss on the sale.

c. If Ted sells the land for $65,000, he has a $25,000 recognized gain on the sale.

d. If Ted sells the land for $57,000, he has a $2,000 recognized gain on the sale.