Packard Corporation Transferred Its 100 Percent Interest to State Company

Packard Corporation transferred its 100 percent interest to State Company as part of a complete liquidation of the company. In the exchange, Packard received land with a fair market value of $300,000. Packard's basis in the State stock was $600,000. The land had a basis to State Company of $500,000. What amount of loss does State recognize in the exchange and what is Packard's basis in the land it receives?

A) $200,000 loss recognized by State and a basis in the land of $300,000 to Packard.
B) No loss recognized by State and a basis in the land of $500,000 to Packard.
C) No loss recognized by State and a basis in the land of $300,000 to Packard.
D) $200,000 loss recognized by State and a basis in the land of $500,000 to Packard.