Simone transferred 100 percent of her stock in Purple Company to Plum Corporation in a Type A merger. In exchange, she received stock in Plum with a fair market value of $532,500 plus $532,500 in cash. Simone's tax basis in the Purple stock was $287,000. What amount of gain does Simone recognize in the exchange and what is her basis in the Plum stock she receives? A) $778,000 gain recognized and a basis in Plum stock of $1,065,000 B) $778,000 gain recognized and a basis in Plum stock of $532,500 C) $532,500 gain recognized and a basis in Plum stock of $287,000 D) $532,500 gain recognized and a basis in Plum stock of $532,500