P owns land worth $500 with an adjusted basis of $220. The land is subject to a mortgage of $25. P transfers the land to M Corp for 100% of the stock and M takes the land subject to the mortgage.

What is the amount realized?

What is the gain realized?

What is the gain recognized (Is the liability considered boot?)

****Would your answer to the prior question change (and if so how) if you were told P took out the mortgage just before transferring the land to M Corp?

*****Suppose the mortgage was taken out as part of the purchase of the land several years ago, but the amount of the mortgage was $270. How would P be taxed on the transfer of the land?