Tara transfers land with a $690,000 adjusted basis and a $700,000 FMV to a corporation in a Sec.351 transfer.Immediately after the transfer,Tara owns 100% of the corporation-stock with a FMV of $615,000.In addition,$85,000 of business-related liabilities are assumed by the corporation with respect to the transfer.No other property is transferred.Tara's recognized gain on the transfer is

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When property is transferred in a Sec. 351 exchange, no gain or loss is generally recognized by the transferor. In this case, Tara transferred property with a FMV of $700,000 and an adjusted basis of $690,000, so no gain or loss is recognized on the transfer. The fact that Tara received stock worth less than the FMV of the property transferred is not relevant for determining recognized gain in a Sec. 351 exchange.

Tara Transfers Land with a $690,000 Adjusted Basis and a $700,000