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Jill transfers real estate into X corporation with a FMV of $1.5m and a tax basis of $500,000. The real estate was held for more than one year. X corporation has 1,000 shares of common stock outstanding. It also has 100 shares of preferred stock outstanding. The preferred stock has a right of redemption. Jill receives 900 shares of common stock and all 100 of the shares of preferred stock in the exchange. Jill recognizes no gain or loss in the transaction because she has control.
a. True
b. False