Exercise $12-17($Algorithmic$)($LO$.7)$

Vogel, Inc., an S corporation for five years, distributes a tract of land held as an investment to Jamari, its majority shareholder. The land was purchased for $$224,800$ ten years ago and is currently worth $$562,000.$

If an amount is zero, enter, $"0".$

a$.$ As a result of the distribution, what is Vogel's recognized capital gain? How much is reported as a distribution to shareholders?

Vogel recognizes

take a $

of $

basis in the land.

which is reported on Schedule K$,$ and

Jamari would

b$.$ What is the net effect of the distribution on Vogel's AAA?

There is a net

of $$

on Vogel's AAA.

c$.$ Assume instead that the land had been purchased for $$562,000$ and was currently worth $$224,800.$ How much would Vogel recognize

as a loss? What would be the net effect on Vogel's AAA? What would be Jamari's basis in the land?

Vogel recognizes a loss $

and the net effect on Vogel's AAA is

of $

$.$ Jamari would

take a $

basis in the land.