Sandra Sherman incorporates her apartment building. It has a basis of $50,000, a FMV of $150,000, is subject to a mortgage of $70,000, and has a…

Sandra Sherman incorporates her apartment building. It has a basis of $50,000, a FMV of $150,000, is subject to a mortgage of $70,000, and has a depreciation recapture potential of $12,000. If Sandra receives stock worth $80,000, she will recognize:a. No gain.b. $30,000 of gain, $12,000 of which is ordinary.c. $12,000 of ordinary income.d. $20,000 of gain, $12,000 of which is ordinary.

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