In 2021, Kenneth Liu incorporated a financial services consulting business. Kenneth's 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 corporation's stock.

What is the gain on Kenneth's transfer of the building to the corporation?

a) $0 b) $50,000

c) $200,000

d) Kenneth recognizes a loss on the transfer

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 Kenneth's transfer of the building to the corporation?

a) $0

b) $50,000

c) $200,000

d) Kenneth recognizes a loss on the transfer

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 Kenneth's transfer of the building to the corporation?

a) $0

b) $50,000

c) $200,000 d) $250,000