Money, Inc., a calendar year S corporation in Denton, Texas, has two unrelated shareholders, each owning 50% of the stock. Both shareholder record a $400,000 stock basis as of January 1. At the beginning of the tax year, Money reports balances in AAA of $300,000 and AEP of $600,000. During the year, Money generates operating income of $100,000. At the end of the year, Money distributes securities worth $1,000,000, with an adjusted basis of $800,000.

The two shareholders consent to an AAA bypass election.

What is the Federal income tax effects of these transactions for the shareholders?

Each shareholder receives a $_______taxable distribution and a $_______tax-free distribution from AAA. The AAA is $______at the end of the year, and each shareholder's basis is $______. AEP is reduced to $______.