. 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 transaction with Bob?

Select one of the following answers and show your work:

a. No gain or loss was recognized.

b. $21,000 gain was recognized.

c. The transfer by Bob to Carl was a gift.

d.  None of the above is correct.