Jermaine owns all 200 shares of Peach Corporation stock valued at $50,000.

C:2-33. 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 a FMV of $50,000. A. No gain will be recognized by Kenya. 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.