Elijah Contributes Land (Basis of $80,000; Fair Market Value of $400,000)

Elijah contributes land (basis of $80,000; fair market value of $400,000) for a 20% interest in a partnership.The land is subject to a mortgage of $50,000, which the partnership assumes.As a result of the transfer, Elijah:

A) Must recognize a gain of $40,000.
B) Has a basis of $40,000 in the partnership.
C) Has a basis of $70,000 in the partnership.
D) Has a basis of $360,000 in the partnership.