Gift of Property Subject To Nonrecourse Mortgage – Nonrecognition v. Recognition?

Father has a property subject to a nonrecourse mortgage with a balance of 200K, and his adjusted basis in the property is 100K. He gift sales the property to his son subject to the nonrecourse mortage. Since a gift is a nonrecognition event, does the son take the 100K carry over basis and assume the 200K loan? But, under Tufts v. Commissioner, hasn’t the father essentially been forgiven the 200K and thus has a recognized gain? These two seem irreconcilable. What would happen here with basis and gain between the father and son?
bostonianinmo, you answered a question for me last year on Crane last year 🙂 Keep the answers coming. Additional Detail: The fair market value of the property at time of transfer was 400K. All other details remain the same. Can a gift under IRC 1015 and Tufts exist together?

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