Z Corporation Purchases 90 Percent of B Corporation's Outstanding Common

Z Corporation purchases 90 percent of B Corporation's outstanding common stock for $1 million on January 1, 2003.On June 15, 2012, B adopts a plan of liquidation and distributes assets with a fair market value of $1.2 million and a basis of $900,000 to Z.B distributes assets with a fair market value of $133,333 and a basis of $90,000 to the minority shareholders.Which of the following is true?

A) Z Corporation recognizes neither gain nor loss and has a basis in the assets received of $900,000.
B) Z Corporation recognizes neither gain nor loss and has a basis in the assets received of $1 million.
C) Z Corporation recognizes $20,000 gain and has a basis in the assets received of $1 million.
D) Z Corporation recognizes a gain of $34,333 and has a basis in the assets received of $1 million.