In 2021, Kenneth Liu incorporated a financial services consulting business. Kenneths only asset that was transferred to the corporation was a building with an adjusted tax basis of $200,000, and a fair market value of $400,000. The building had an existing mortgage of $100,000 that was assumed by the corporation. Immediately after the transfer, Kenneth owned 100% of the corporations stock.

15. What is the gain on Kenneths transfer of the building to the corporation?

a)$0

b)$50,000

c)$200,000

d)Kenneth recognizes a loss on the transfer

16. Assume the same facts as question 16, except that the building had an existing mortgage of $250,000 that was assumed by the corporation. What is the gain on Kenneths transfer of the building to the corporation?

a)$0

b)$50,000

c)$200,000

d)Kenneth recognizes a loss on the transfer

17. Assume the same facts as question 16, except that the building had an existing mortgage of $450,000 that was assumed by the corporation. What is the gain on Kenneths transfer of the building to the corporation?

a)$0

b)$50,000

c)$200,000

d)$250,000