Under the Terms of Their Divorce Agreement Executed in October

Under the terms of their divorce agreement executed in October 2012, Keith transferred Corporation M stock to his former wife, Karen, as a property settlement. At the time of the transfer, the stock had a basis to Keith of $20,000 and a fair market value of $50,000. What is the tax consequence of this transaction to Keith, and what is Karen's basis in the Corporation M stock?

A) Keith has a gain of $30,000; Karen's basis is $20,000.
B) Keith has a gain of $30,000; Karen's basis is $50,000.
C) Keith has no gain or loss; Karen's basis is $20,000.
D) Keith has no gain or loss; Karen's basis is $50,000.