Sarah transfers property (basis of $120,000 and fair market value of $400,000) to Designer Corporation for 80% of its stock (worth $350,000) and a long-term note (worth $50,000), executed by Designer Corporation and made payable to Sarah. As a result of the transfer

a. Sarah recognizes no gain.

b. Sarah recognizes a gain of $50,000.

c. Sarah recognizes a gain of $280,000.

d. Sarah recognizes a gain of $230,000.

e. None of the above