Exercise 22-17 (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 $197,600 ten years ago and is currently worth $494,000. 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 a capital gain of S 296,400 which is reported on Schedule K, and a proportionate share of it passes through to the shareholders. V. Jamari would take a S 494,000 basis in the land. b. What is the net effect of the distribution on Vogel's AAA? There is a net decrease of S 197,600 on Vogel's AAA. c. Assume instead that the land had been purchased for $494,000 and was currently worth $197,600. 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 s 0and the net effect on Vogel's AAA is a decrease would take a S 197,600 basis in the land. Feedback of $ X. Jaman Check My Work When an S corporation distributes property (instead of cash) to a shareholder, the effect on AAA and shareholder's basis must be determined.