The stock of lavender corporation is held as follows: 80% by jade corporation (basis of $400,000) and 20% by tiffany (basis of $100,000). lavender corporation is liquidated in december of the current year, pursuant to a plan adopted earlier in the year. pursuant to the liquidation, lavender corporation distributed asset a (basis of $600,000, fair market value of $900,000) to jade, and asset b (basis of $250,000, fair market value of $225,000) to tiffany. no election is made under § 338. with respect to the liquidation of lavender:

(a) lavender recognizes a loss of $25,000 on the distribution of asset b.
(b) jade has a basis in asset a of $900,000.
(c) tiffany has a basis in asset b of $225,000.
(d) jade recognizes a gain of $500,000.
(e) lavender recognizes a gain of $300,000 on the distribution of asset a.