Philip transfers land and equipment adjusted bases of $350,000 and $50,000, respectively, to a newly formed corporation in exchange for 100% of the stock. The corporation assumes a $500,000 liability on the transferred land. Determine (1) stock basis in Philips hands and (2) the amount of gain Philip recognizes from the exchange. (20 Points)

$400,000 and $0

$0 and $100,000

$0 and $400,000

$500,000 and $0