In Order to Induce Parakeet Corporation to Build a New

In order to induce Parakeet Corporation to build a new manufacturing facility in Oxford,Mississippi,the city donates land (fair market value of $250,000) and cash of $50,000 to the corporation.Within several months of the donation,Parakeet Corporation spends $350,000 (which includes the $50,000 received from Oxford) on the construction of a new plant located on the donated land.

A) Parakeet recognizes income of $50,000 as to the donation.
B) Parakeet has a zero basis in the land and a basis of $350,000 in the plant.
C) Parakeet recognizes income of $300,000 as to the donation.
D) Parakeet has a zero basis in the land and a basis of $300,000 in the plant.
E) None of the above.