Bill Contributed Business Realty ($375,000 FMV and $113,000 Adjusted Basis)

Multiple Choice

Bill contributed business realty ($375,000 FMV and $113,000 adjusted basis) to Zeta Inc. in exchange for Zeta common stock. Immediately after the exchange, Bill owned 53% of Zeta's outstanding stock. Compute gain recognized by Bill and by Zeta on this exchange.

A) Bill $0; Zeta $0
B) Bill $262,000; Zeta $0
C) Bill $262,000; Zeta $375,000
D) Bill $0; Zeta $375,000