David organizes White Corporation with a transfer of land (basis of $200,000, fair market value of $600,000) that
is subject to a mortgage of $150,000. A month before the incorporation, David borrowed $100,000 for personal purposes and gave the bank a lien on the land. White Corporation issues stock worth $350,000 to David and assumes the mortgage of $150,000 and the personal loan of $100,000. What are the tax consequences of the incorporation to David and to White Corporation?
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