Dave Contributes Land (Adjusted Basis of $30,000; Fair Market Value

True/False

Dave contributes land (adjusted basis of $30,000; fair market value of $100,000) to Tan, Inc., in exchange for all of its stock. The land is encumbered by a mortgage of $27,000 which Tan assumes. Since the transaction qualifies for nonrecognition treatment under § 351, Tan's adjusted basis for the land is $73,000 ($100,000 - $27,000) and Dave's adjusted basis for the stock is $3,000 ($30,000 - $27,000).