As part of a qualifying tax free reorganization Jones Corp exchanges $1,000,000 of its common stock and equipment worth $200,000 (basis of $50,000) for all of Waggle Corps assets which have a basis of $500,000. Waggle distributes the Jones stock and equipment received to their shareholders who have a basis in their Waggle stock of $500,000. Waggle has E&P of $100,000 at the time of the distributions

How much gain does gain, or loss, do Waggles shareholders recognize as part of their taxable income as a result of the reorganization?