Unless the question expressly provides to the contrary, you should assume that:
I. all events occurred in "the current taxable year."
II. all persons are United States citizens.
III. there is no tax avoidance purpose for any transaction, and that with respect to any mortgage on any property, there was a bona fide business purpose for incurring the debt; and
IV. with respect to each partnership question, the partnership has no hot assets, has no debts or other liabilities, and has no Section 754 election in effect.
Sandra transferred property to her newly formed corporation, SDA Inc. The property had an adjusted basis to Sandra of $60,000 and a fair market value of $100,000 on the date of the transfer and the corporation assumed an $80,000 liability on the property. On the same day, and in exchange for the property she transferred to SDA Inc., Sandra received a payment of $10,000 and 100 percent of SDA Inc.'s only class of stock. How much gain was recognized by Sandra as a result of this transaction?