Henry transfers property with an adjusted basis of $90,000 and an FMV of $100,000 to a newly-formed corporation in a Sec. 351 exchange. Henry receives stock with an FMV of $80,000 and a short-term note with a $20,000 FMV. Henry's recognized gain is
A) $0.
B) $5,000.
C) $10,000.
D) $20,000.
C) $10,000.
Realized gain is recognized to the extent of boot received. The short-term note is boot, but only $10,000 (the realized gain) is recognized.
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