XYZ Corporation distributed land Jim, its sole shareholder, in a liquidating distribution. At the time of the distribution, the land had a fair market value of $120,000 and XYZ Corporations adjusted basis in the land was $100,000. The land was encumbered by a $140,000 mortgage, which mortgage was assumed by the shareholder. How much gain did XYZ Corporation recognize as a result of the distribution?

$0

$20,000

$40,000

$100,000