Sampson owned a triplex valued at $160,000, with an adjusted basis of $70,000. King owned a duplex valued at $155,000. Both properties were owned free and clear. They exchanged their properties, with King giving Sampson $5,000 in cash. For Federal Income Tax purposes:

A: Both will be taxed on the difference between the value and the basis;
B: King has a taxable gain;
C: Sampson has a recognized gain;
D: Neither has a taxable gain.

Answer: C: Sampson has a recognized gain;