Emily Owns Land for Investment Purposes That Has a FMV

Emily owns land for investment purposes that has a FMV of $300,000 (basis of $260,000) . She exchanges the land, plus $40,000 cash, for a warehouse to be used in her business. The warehouse is worth $420,000, but is subject to a mortgage of $80,000 which Emily will assume. The gain realized by Emily on the exchange is

A) $120,000.
B) $80,000.
C) $160,000.
D) $40,000.