MrsBrinkley Transferred Business Property (FMV $340,200; Adjusted Tax Basis $111,700)to

Multiple Choice

Mrs.Brinkley transferred business property (FMV $340,200; adjusted tax basis $111,700) to M&W Inc.in exchange for a 36% interest in M&W Partnership.Compute M&W's recognized gain on its exchange of an equity interest for property and determine M&W's tax basis in the property received from Mrs.Brinkley.

A) No gain recognized; $340,200 tax basis in property
B) No gain recognized; $111,700 tax basis in property
C) $340,200 gain recognized; $111,700 tax basis in property
D) $111,700 gain recognized; $111,700 tax basis in property