parts a-d

(a) A 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. What are the consequences to all of the parties?

(b) Suppose in (a) that the mortgage was placed on the property immediately before the transfer to Newco. A wanted cash in order to buy a yacht to be used for personal purposes, so he took out a mortgage on the land. Would this change your answer?

(c) 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?

(d) Same as (c) except that A also transfers accounts payable of 10. A is a cash basis taxpayer. How would this change your answer