Kevin formed Sustainable, Inc. in a valid Section 351 transaction by transferring land worth $200,000 with a basis of $100,000 to the corporation in exchange for 100% of its stock. The land was subject to a mortgage of $127,000 which was incurred two years ago for valid business reasons. Sustainable, Inc. took the building subject to the mortgage. Both Kevin and Sustainable properly use the cash method of accounting. As a result of these events, Kevin: A. Must recognize a gain of $127,000 B. Must recognize a gain of $100,000 C. Must recognize a gain of $27,000 D. Has no recognized gain or loss
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