Mr Jamail Transferred Business Personalty (FMV $187,000; Adjusted Tax Basis

Multiple Choice

Mr Jamail transferred business personalty (FMV $187,000; adjusted tax basis $29,900) to J&K Inc. in exchange for J&K common stock. Which of the following statements is true?

A) If Mr. Jamail owns 14% of J&K's outstanding stock immediately after the exchange, he must recognize a $157,100 gain.
B) If Mr. Jamail owns 74% of J&K's outstanding stock immediately after the exchange, he must recognize a $157,100 gain.
C) If Mr. Jamail owns 81% of J&K's outstanding stock immediately after the exchange, he must recognize a $157,100 gain.
D) Statements a. and b. are true.