Dick, a Cash Basis Taxpayer, Incorporates His Sole Proprietorship With Respect to This Transaction:
A) Orange Corporation's Basis in Transfers

Dick, a cash basis taxpayer, incorporates his sole proprietorship. He transfers the following items to newly created Orange Corporation. $\begin{array}{lll}&&\text { Fair Market }\\&\text { Adjusted Basis }&\text { Value }\\\text { Cash } & \$ 10,000 & \$ 10,000 \\\text { Building } & 120,000 & 175,000 \\\text { Mortgage payable secured by the building and held } & 135,000 & 135,000 \\\text { for } 15 \text { years) } & &\end{array}$ With respect to this transaction:

A) Orange Corporation's basis in the building is $120,000.
B) Dick has no recognized gain.
C) Dick has a recognized gain of $5,000.
D) Dick has a recognized gain of $10,000.
E) None of these.