Dick, a Cash Basis Taxpayer, Incorporates His Sole Proprietorship ? with Respect to This Transaction:
A)Orange Corporation's Basis in the Following

Multiple Choice

Dick, a cash basis taxpayer, incorporates his sole proprietorship.He transfers the following items to newly created Orange Corporation. $\begin{array}{lrr} &&\text { Fair Market }\\& \text { Adjusted Basis } & \text { Value } \\\text { Cash } & \$ 10,000 & \$ 10,000 \\\text { Buil ding } & 120,000 & 175,000 \\\text { Mortgage payable (secured by the building and held } & 135,000 & 135,000\\\text { for } 15 \text { years) }\end{array}$ ? With respect to this transaction:

A) Orange Corporation's basis in the building is $120,000.
B) Dick has no recognized gain.
C) Dick has a recognized gain of $5,000.
D) Dick has a recognized gain of $10,000.
E) None of the above.