Question: 3) Jermaine owns all 200 shares of Peach Corporation stock valued at $50,000. Kenya, a new shareholder, receives 200 newly issued shares from Peach Corporation

3) Jermaine owns all 200 shares of Peach Corporation stock valued at $50,000. Kenya, a new shareholder, receives 200 newly issued shares from Peach Corporation in exchange for inventory with an adjusted basis of $40,000 and an FMV of $50,000. Which of the following statements is correct? A) No gain will be recognized by Kenya. B) The transaction results in $10,000 of ordinary income for Kenya. C) The transaction results in $10,000 of capital gain for Kenya. D) Kenya may defer the recognition of any tax until the stock is sold

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