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.