Leslie transfers land to Newco in exchange for 100% of Newco's stock. The land has a basis of $50, FMV of $100 and is subject to a mortgage of $40.

1. What are the consequences to each of the parties?
2. Suppose in that the mortgage was placed on the property immediately before the transfer to Newco. Leslie wanted cash in order to buy a yacht to be used for personal purposes, so she took out a mortgage on the land. Would this change your answer?
3. Suppose instead that the mortgage was for $60. Suppose further that this mortgage was incurred on the purchase of the property many years ago. Would this change your answer?
4. Same as (c) except that Leslie also transfers accounts payable of $10. Leslie is a cash basis taxpayer. How would this change your answer?