Lynn Transfers Property (Basis of $225,000 and Fair Market Value

Multiple Choice

Lynn transfers property (basis of $225,000 and fair market value of $300,000) to Condor Corporation in exchange for § 1244 stock. The transfer qualifies as a nontaxable exchange under § 351. In the current year, Lynn sells the Condor stock for $100,000. Assume Lynn files a joint return with her husband, Ricky. With respect to the sale, Lynn has:

A) An ordinary loss of $125,000.
B) An ordinary loss of $100,000 and a capital loss of $25,000.
C) A capital loss of $125,000.
D) An ordinary loss of $100,000 and a capital loss of $100,000.
E) None of these.