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 $265,600 ten years ago and is currently worth $664,000.

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

Looking for an answer and calculation for point C.

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 of $ which is reported on Schedule K, and a proportionate share of it passes through to the shareholders . Jamari would take a $ basis in the land. 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 $664,000 and was currently worth $265,600. 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 $X Jamari would take a q basis in the land