This year, A transferred land worth $150,000 (basis $90,000) to his wholly owned corporation in exchange for voting, preferred stock.The land was subject to a mortgage of $40,000.Due to the transfer, A must recognize gain of

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The transfer of property to a controlled corporation is tax-free under IRC Section 351. The gain recognized is limited to the amount of liabilities assumed by the corporation that exceed the adjusted basis of the property transferred. In this case, the liabilities assumed by the corporation ($40,000) do not exceed the adjusted basis of the property transferred ($90,000), so no gain is recognized.

This Year, a Transferred Land Worth $150,000 (Basis $90,000) to His