Evan and William formed Barleycorn Corporation to engage in the distilling business. Evan contributed $250,000 in cash and William contributed land and a warehouse building previously held out for rental. 

The land had a basis of $10,000, and the building had an adjusted basis of $30,000. The fair market value of land is $87,500, and the fair market value of the building is $262,500. 

William will receive 10 shares of common stock, and the corporation will take the property subject to $100,000 nonrecourse purchase money mortgage lien, but it will not expressly assume the mortgage indebtedness. 

What are the tax consequences to William and the corporation?