X owns a rental building (its only asset) with a

X owns a rental building (its only asset) with a gross FMV of $1,000, subject to a nonrecourse mortgage of $400. X’s adjusted basis for this building is $300. A owns all of of X’s stock, with a total basis of $100. X has $200 of E&P. X is on the accrual method of accounting and reports on the calendar year. Assume that the corporate tax payable by X on $700 gain is $250 and on $600 gain is $200

Determine the amounts and character of realized and recognized gain or loss to all parties, the time of recognition, and the transferee’s basis in any property received in kind

1) X sells the building, subject to the mortgage, to B in the current year for $600 in cash. X hen liquidates, distributing to A all of the cash remaining after paying its taxes, in cancellation of A’s stock in the current year.