Sarah owns 100% of FlexCo Corporation. In 2021, she transfers a building with a fair market value of $1,000,000 and a basis of $300,000 to FlexCo for additional shares of FlexCo stock. FlexCo assumes a mortgage on the building of $600,000. Sarah issues a note to Flexco for $300,000, payable in five years.

How much gain or loss does Sarah recognize on the transaction?

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