Use the Following Information for Questions 112 Through 114

Multiple Choice

Use the following information for questions 112 through 114.
Two independent companies, Hager Co. and Shaw Co., are in the home building business. Each owns a tract of land held for development, but each would prefer to build on the other's land. They agree to exchange their land. An appraiser was hired, and from her report and the companies' records, the following information was obtained: The exchange was made, and based on the difference in appraised fair values, Shaw paid $60,000 to Hager. The exchange lacked commercial substance.
-For financial reporting purposes, Hager should recognize a pre-tax gain on this exchange of

A) $0.
B) $12,000.
C) $60,000.
D) $96,000.