Diana Transfers Property Worth $275,000, Basis of $100,000, to Sycamore

Diana transfers property worth $275,000, basis of $100,000, to Sycamore Corporation for 80% of the stock in Sycamore, worth $150,000, and a long-term note, executed by Sycamore Corporation and made payable to Diana, worth $125,000.

A) Diana recognizes no gain on the transfer.
B) Diana recognizes a gain of $125,000 on the transfer.
C) Diana recognizes a gain of $150,000 on the transfer.
D) Diana recognizes a gain of $175,000 on the transfer.
E) None of the above.