A Shareholder Bought 2,000 Shares of Zee Corporation for $90,000

Multiple Choice

A shareholder bought 2,000 shares of Zee Corporation for $90,000 several years ago.When the stock is valued at $200,000,Zee redeems these shares in exchange for 6,000 shares of Yea Corporation stock.This transaction meets the requirements of § 368.Which of the following statements is true with regard to this transaction?

A) The shareholder has a recognized gain of $110,000.
B) The shareholder has a postponed gain of $110,000.
C) The shareholder has a basis in the Yea stock of $200,000.
D) Gain or loss cannot be determined because the value of the Yea stock is not given.
E) None of the above are true.