An individual owns land with an adjusted basis of $55,000 and a FMV of $85,000. The land is paid in full with no liabilities outstanding. The individual needs to obtain $15,000 in cash for personal use. The individual mortgages the land to obtain the cash. The individual wholly owns a corporation and subsequently transfers the land and the mortgage to the corporation for additional stock. What is the effect of the liability transfer from the individual to the corporation?

The Answer is: The individual will have a recognized gain of $15,000 but I am not sure why?