Sheryl transfers two assets to a partnership in separate transactions: a. Land with a $30,000 adjusted basis and a $130,000 FMV in exchange for a 15% interest in the partnership. b. A machine with a $39,000 adjusted basis and a $25,000 FMV The partnership signs a note for $25,000 as consideration for the exchange (Assume Sheryl has no partnership interest.) Explain whether Sheryl recognizes gain or loss for either or both of these transactions, and discuss the reason for any difference in tax treatment OA. Sheryl recognizes no gain or loss for transaction a, but recognizes a $14,000 loss for transaction b. According to Sec. 721, no gain or loss is recognized on the transfer of property in exchange for a partnership interest. Transaction b is treated as a sale of property because she did not receive a partnership interest OB. Sheryl recognizes a(n) $100,000 gain for transaction a and recognizes a $14,000 loss for transaction b. According to Sec. 721, the transfer of property in exchange for a partnership interest is treated as a sale of property OC. Sheryl recognizes no gain or loss for either transaction a or transaction b. According to Sec. 721, no gain or loss is recognized on the transfer of property in exchange for a partnership interest. Transaction b is also treated as a transfer of property in exchange for a partnership interest because she received a partnership note OD. Sheryl recognizes no gain or loss for transaction a, but recognizes a $14.000 loss for transaction b. According to Sec. 721, no gain or loss is recognized on the transfer of property in exchange for less than an 80% partnership interest, Transaction b is treated as a sale of property because she did not receive a partnership interest