Pursuant to a complete liquidation, Wren Corporation distributes its only remaining asset to Kay, its sole shareholder: land with a basis of $500,000 and a FMV of $1 million. Kay has a $700,000 basis in her stock. On the distribution, Wren recognizes a $500,000 gain, but Kay recognizes no gain Neither Wren nor Kay will recognizes gains, i.e., a nontaxable exchange Wren recognizes a $500,000 gain, and Kay recognizes a $200,000 loss Wren recognizes no gain, and Kay recognizes a $200,000 loss