Penguin Corporation Purchased Bonds (Basis of $95,000) of Its 100

Penguin Corporation purchased bonds (basis of $95,000) of its 100% owned subsidiary, Finch Corporation, at a discount. Pursuant to a § 332 liquidation and in satisfaction of the indebtedness, Finch distributes land worth $100,000 (basis of $110,000) to Penguin. Which of the following statements is correct with respect to the distribution of land?

A) Neither Finch nor Penguin recognize gain (or loss) .
B) Finch recognizes a loss of $10,000 and Penguin recognizes no gain.
C) Finch recognizes no loss and Penguin recognizes a gain of $5,000.
D) Finch recognizes a loss of $10,000 and Penguin recognizes a gain of $5,000.
E) None of the above.