Lily exchanges a building she uses in her rental business for a building owned by Kendall, which Lily will use in her rental business. The adjusted basis of Lily's building is $120,000 and the fair market value is $170,000. Which of the following statements is correct?
A. Lily's recognized gain is $50,000 and her basis for the building she received is $120,000.
B. Lily's recognized gain is $50,000 and her basis for the building she received is $170,000.
C. Lily's recognized gain is $0 and her basis for the building she received is $120,000.
D. Lily's recognized gain is $0 and her basis in the building she received is $170,000.
E. None of the above is correct!
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