Problem 4-38 (LO. 1, 2, 3) Allie forms Broadbill Corporation by transferring land (basis of $125,000, fair market value of $775,000), which is subject to a mortgage of $375,000. One month prior to incorporating Broadbill, Allie borrows $100,000 for personal reasons and gives the lender a second mortgage on the land. Broadbill Corporation issues stock worth $300,000 to Allie and assumes the mortgages on the land. If an amount is zero, enter "o". a. What are the tax consequences to Allie and to Broadbill Corporation? Since only $ 357(b) is applicable X , Allie has a realized gain of $ 350,000 X of which s 475,000 is recognized. Broadbill Corporation has a basis of 600,000 in the land and Allie has a $ 125,000 basis in the stock. Feedback Check My Work b. How would the tax consequences to Allie differ if she had not borrowed the $100,000? Since only $ 357(b) is applicable vX, Allie has a recognized gain of $ 250,000. Broadbill Corporation has a basis of 600,000 X in the land and Allie has a $ 125,000 X basis in the stock