Sarah and Emily Form Red Corporation with the Following Investments

Sarah and Emily form Red Corporation with the following investments: Sarah transfers computers worth $200,000 (basis of $80,000) , while Emily transfers real estate worth $180,000 (basis of $40,000) and services (worth $20,000) rendered in organizing the corporation. Each is issued 600 shares in Red Corporation. With respect to the transfers:

A) Sarah has no recognized gain; Emily recognizes income/gain of $160,000.
B) Neither Sarah nor Emily recognizes gain or income.
C) Red Corporation has a basis of $60,000 in the real estate.
D) Emily has a basis of $60,000 in the shares of Red Corporation.
E) None of the above.