During the current year, Ecru Corporation is liquidated and distributes its only asset, land, to Kena, the sole shareholder. On the date of the distribution, the land has a basis of $250,000, a fair market value of $650,000, and is subject to a liability of $500,000. Kena, who takes the land subject to the liability, has a basis of $120,000 in the Ecru stock. With respect to the distribution of the land, Which of the following is correct?
a. Kena recognizes a gain of $530,000
b. Ecru Corporation recognizes a gain of $250,000
c. Kena recognizes a gain of $30,000
d. Kena has a basis of $250,000 in the land
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