Barnett Corporation Owns an Office Building That Cost $900,000

Multiple Choice

Barnett Corporation owns an office building that cost $900,000. Barnett has taken $600,000 of depreciation on the building. The property is subject to a $600,000 mortgage. The office building has a current FMV of $400,000. Barnett Corporation is liquidated and the office building is distributed to a single individual shareholder who assumes the mortgage. Barnett Corporation must recognize

A) no gain or loss.
B) a $300,000 gain.
C) a $100,000 gain.
D) none of the above