Betty and Sue jointly purchased a piece of property for $400,000. They later formed the B&S Corporation. The FMV of the property at the time they formed the corporation was $600,000. They transferred the property to the corporation in exchange for all of the authorized stock of B&S. The stock was valued at $600,000 at the time of the exchange. What amount of gain or loss should Betty, Sue, and B&S Corporation recognize from the transfer of the property?
a) Betty, Sue, and B&S should each recognize a loss of (3,000).
b) Betty, Sue, and B&S should each recognize zero gain or loss.
c) Betty and Sue should each recognize a gain of $100,000, but B&S should recognize nogain or loss.
d) Betty and Sue should each recognize a gain of $200,000, but B&S should recognize nogain or loss.