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Juan organized Teal Corporation 10 years ago. He contributed
property worth $1 million (basis of $200,000) for 2,000 shares of
stock in Teal (representing 100% ownership). Juan later gave each of
his children, Julie and Rachel, 500 shares of the stock. In the current
year, Juan transfers property worth $400,000 (basis of $150,000) to
Teal for 500 more of its shares. What gain or loss will Juan recognize
on the transfer? Explain.