Bob, a sole proprietor, has operated as an unincorporated business. At the advice of counsel, Bob incorporates his business by forming X Corporation. In the exchange, X receives land (basis of $300,000 and fair market value of $3 million), trade accounts payable of $110,000, and a loan of $490,000 due to a bank. The loan was used by Bob to purchase the land for the business to rent to local farmers. X Corporation assumes all of the liabilities transferred to it. Does Bob recognize any gain on the incorporation? Explain. What basis does Bob have in his X stock? What basis does X Corporation have in the assets it receives?