Texas Corporation Is Undergoing a Complete Liquidation and Distributes Land

Multiple Choice

Texas Corporation is undergoing a complete liquidation and distributes land to Robert, one of its shareholders, in exchange for all of Robert's stock. The land has a basis of $300,000 and an FMV of $400,000 on Texas Corporation's books and is subject to a $325,000 liability. Robert assumes the liability on the property. Robert's basis in his Texas Corporation stock is $100,000. What is the amount of gain or loss recognized by Robert on the distribution?

A) $25,000 loss
B) $25,000 gain
C) $175,000 gain
D) No gain or loss is recognized.