Lance transferred land having a $180,000 FMV and a $105,000 adjusted basis, which is subject to a $150,000 mortgage in exchange for a one-third interest in the Trois Partnership. Lance acquired the land in 2010. The partnership owes no other liabilities. Lance, Rhonda, and Zach share profits and losses equally and each has a one-third interest in partnership capital. The tax effect to Lance is
A. recognized gain of $45,000 on the transfer.
B. recognized loss of $45,000 on the transfer.
C. recognized gain of $75,000 on the transfer.
D. no gain or loss recognized.
Answer: D
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