Secret Corporation (E & P of $1,350,000) distributes land (basis of $392,000, fair market value of $823,000) to Saul, a shareholder, to carry out a qualifying stock redemption. Saul had a basis of $95,500 in the shares redeemed. Which of the following is an incorrect statement regarding the redemption?

Question options:

A. If the land is distributed subject to a $385,000 liability, Saul will recognize a gain of $342,500.

B. If the land is distributed subject to a $850,000 liability, Secret Corporation will recognize a gain of $458,000.

C. If the land is distributed subject to a $385,000 liability, Secret Corporation will recognize a gain of $431,000.

D. If the land is distributed subject to a $385,000 liability, Saul will have a basis in the land of $823,000.

E. None of these.