1. Pursuant to a tax-free reorganization in the current year, Chi exchanged 100 shares of Mountain Corporation common stock for 100 shares of Country Corporation stock and, in addition, received $1,000 cash, which was not in excess of Chis ratable share of Mountains undistributed earnings and profits. Chi paid $20,000 for the Mountain stock 15 years ago. The Country stock had a fair market value of $24,000 on the date of the exchange and represented a 5% interest in the outstanding Country stock. What is the amount of recognized gain to be reported by Chi in the current year?
   1. $0.
   2. $1,000.
   3. $5,000.
   4. $25,000.