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10. Liliana and Bahti form Peach Corporation Liliana transfers land that is Sec. 1231 property, with an adjusted basis of $18,000 and an FMV of $20.000 in exchange for one-half of the Peach Corporation stock Bahn trankfers equipment that originally costs $28.000 on which he has taken $6,000 in depreciation deductions. The equipment has an FMV of $25,000 and he receives one half of the stock and a $5,000 short-term note. The transaction meets the requirements of Sec 351 Which statement below is correct? A) There is no recognized gain or loss B) Liliana recognizes a $2,000 Sec 1231 gain and Bahri recognizes $5,000 as ordinary income C) Liliana recognizes a $2,000 Sec. 1231 gain and Bahri recognizes a $5,000 Sec 1231 gain D) Liliana recognizes no gain and Bahri recognizes $3.000 as ordinary income