XYZ Corporation had one shareholder. Pursuant to a plan of liquidation, XYZ Corporation distributed land to its sole shareholder, Jane, as 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, and the mortgage was assumed by the shareholder. How much gain did XYZ Corporation recognize as a result of the distribution?

a. 0.

b. $20,000.

c. $40,000.

d. $100,000.