Bob owned a duplex used as rental property. The duplex had an adjusted basis to Bob of $86,000 and a fair market value of $300,000. Bob transferred the duplex to his brother, Carl, in exchange for a...

Bob owned a duplex used as rental property.  The duplex had an adjusted basis to Bob of $86,000 and a fair market value of $300,000.  Bob transferred the duplex to his brother, Carl, in exchange for a triplex that Carl owned.  The triplex had an adjusted basis to Carl of $279,000 and a fair market value of $300,000.  Two months after the exchange, Carl sold the duplex to his business associate to whom he was not related for $312,000.  How much, if any, gain or loss did Carl recognize with respect to the sale by Carl to his business associate?

Select one of the following answers and show your work below:

a. No gain or loss was recognized.

b. $11,000 gain was recognized.

c. $12,000 gain was recognized.

d. None of the above is correct.