Brian organized Y Corporation and transferred a building with a basis of $100,000 and a fair market value of $400,000. The building was subject to a first mortgage of $80,000 which was incurred two years ago for valid business reasons. Two weeks before the incorporation of Y, Brian borrowed $10,000 for personal purposes and secured the loan with a second mortgage on the building. In exchange for the building, Y Corporation will issue $310,000 of Y common stock to Brian and will take the building subject to the mortgages. (a) What are the tax consequences to Brian on the transfer of the building to Y Corporation? (b) What result if Brian did not borrow the additional $10,000 and, instead, Y Corporation borrowed $10,000 form a bank and gave Brian $310,000 of Y common stock, $10,000 cash and will take the building subject to the $80,000 first mortgage? (c) Is the difference in results between (a) and (b), above, justified?