This Year D Transferred Property Worth $10,000 (Basis $6,000) to a Newly

This year D transferred property worth $10,000 (basis $6,000) to a newly formed corporation in exchange for all of its stock worth $10,000.

A) D realizes a $4,000 gain which is not recognized.In addition, D will never pay any tax on this gain.Congress elected to forgive taxes in this instance to ensure that tax considerations do not interfere with the choice of business form.
B) D realizes a $4,000 gain which is not recognized.The gain escapes tax only temporarily.
C) D realizes a $4,000 gain which must be recognized at the time of the exchange.When the shareholder has income, it must be reported.
D) D realizes a gain of $4,000.In this case, the gain must be recognized under the continuity of interest doctrine.