Rick Transferred the Following Assets and Liabilities to Warbler Corporation

Multiple Choice

Rick transferred the following assets and liabilities to Warbler Corporation. In return, Rick received $75,000 in cash plus 90% of Warbler Corporation's only class of stock outstanding fair market value of $225,000) .

A) Rick has a recognized gain of $60,000.
B) Rick has a recognized gain of $75,000.
C) Rick's basis in the stock of Warbler Corporation is $270,000.
D) Warbler Corporation has the same basis in the assets received as Rick does in the stock.
E) None of the above.