James Corporation Exchanges a Building (Fair Market Value = $800,000

James corporation exchanges a building (fair market value = $800,000, adjusted basis = $600,000) that has a $100,000 mortgage for another building owned by Pete Corporation (fair market value = $1,100,000, adjusted basis = $600,000) that is encumbered by a $400,000 mortgage.
-Refer to the information in the preceding question. What are James's and Pete's recognized gains on the exchange, respectively?

A) 0, 0
B) 0, $300,000
C) $100,000, 0
D) $100,000, $400,000
E) None of the above