Tax Drill Section 357(b) Ester transfers and basis of $200,000 and fair market value of $355,000) to a controlled corporation in return for stock in the corporation However, shortly before the transfer, Ester mortgages the land and use the $25,000 proceeds to meet personal obligations. Nong with the land, the mortgage is transferred to the corporation Ester has a realized in on the transfer of and a recognized gain of