TH IncHas Been in the Storage Business for 10 Years

TH Inc.has been in the storage business for 10 years.Prior to a stock redemption, TH has 100 shares of stock outstanding.The stock owned and the number of shares redeemed from each shareholder are as follows: $\begin{array} { l }\text { Name }&\text { Shares Owned before Redemption }&\text { Adrusted Basis }\\\text { L3 } & \$ 4,000 \\\text { E12 } & 3,000\\D&60&6,000\\G&5&1,000\\\text { MMM Corp. }&20&2,000\\100\end{array}$
L is E's mother and D owns 40 percent of MMM Corp; otherwise the parties are unrelated.TH has $100,000 in accumulated and current earnings and profits.All of the parties have owned their stock since the inception of the corporation.If in an independent transaction TH distributes a warehouse used in the storage business worth $10,000 (basis $8,000) and land worth $15,000 (basis $20,000) in redemption of stock,

A) No gain or loss will be recognized.
B) A $2,000 gain will be recognized.
C) A $2,000 gain and a $5,000 loss will be recognized.
D) None of the above are true.