Max Transfers the Following Properties to a Newly Created Corporation

Max transfers the following properties to a newly created corporation for $90,000 of stock and $10,000 cash in a transaction that qualifies under Sec.351. $$\begin{array} { | l | c | c | c | } \hline & \text { Asset One } & \text { Asset Two } & \text { Asset Three } \\\hline \text { FMV } & \$ 30,000 & \$ 45,000 & \$ 25,000 \\\text { Basis } & 35,000 & 40,000 & 20,000 \\\hline\end{array}$$ Max's recognized gain is

A) $3,000.
B) $5,000.
C) $7,000.
D) $10,000.