Tax Drill$-$Section $357($c$)$

Martin transfers real estate with an adjusted basis of $$260,000$ and fair market value of $$350,000$ to a newly formed corporation in exchange for $100\%$ of the stock. The corporation assumes the liability on the transferred real estate in the amount of $$300,000.$

If amount is zero, enter $"0".$

Martin has a recognized gain on the transfer of $ $$ V$.$ and a basis of & $$ X for his stock.

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Without a provision to the contrary, the transfer of mortgaged property to a controlled corporation could trigger gain to the property transferor if the corporation took over the mortgage.