Randy and Audra formed a corporation to which Randy transferred equipment that had a fair market value of $25,000 and zero adjusted basis. Audra transferred a building that had a fair market value of $100,000 and an adjusted basis to her of $80,000. In return, Randy received 200 shares and Audra received 800 shares of the corporation's outstanding shares of its only class of stock. As a result of this transaction, Audra should report

a.

A Sec. 1250 gain of $20,000.

B.Neither a gain nor a loss.

C.An ordinary gain of $20,000.

D.

A capital gain of $20,000.