Jill transfers real estate into X corporation with a FMV of $$1\mathrm{.}5$m and a tax basis of $$500,000.$ The real estate was held for more than one year. X corporation has $1,000$ shares of common stock outstanding. It also has $100$ shares of preferred stock outstanding. The preferred stock has a right of redemption. Jill receives $900$ shares of common stock and all $100$ of the shares of preferred stock in the exchange. The FMV of the preferred stock is $$25,000.$ Jill recognizes $$25,000$ of long$-$term capital gain.

True or

False