Distribution of Appreciated Property: General Concepts. During the year, XYZ Sand and Gravel Corporation distributed a parcel of land to its sole shareholder, A. The land (value $20,000, cost $3,000) had been used in the corporations quarry operations; property was subject to a mortgage of $7,000. a. What is the effect of the distribution on the shareholders taxable income? b. What is As basis in the land? c. What is the effect of the distribution on XYZs taxable income? d. What is the effect of the distribution on XYZs E&P? e. How would your answers to (a), (b), (c), and (d) change if A were a corporation.