$[$The following information applies to the questions displayed

below.$]$

Lone Star Company is a calendar$-$year corporation, and this year

Lone Star reported $$128,000$ in current E&P that accrued evenly

throughout the year. At the beginning of the year, Lone Star's

accumulated E&P was $$15,360.$ Lone Star declared $$38,400$ in

cash distributions on each of the following dates: April $1,$ July $1,$

October $1,$ and December $31.$

Note: Leave no answer blank. Enter zero if applicable. Negative

amount should be indicated by a minus sign.

Problem $07-40$ Part c $($Algo$)$

c$.$ If Matt's basis in the Lone Star shares was $$8,960$ at the beginning of the year,

how much capital gain will he recognize on the sale and distributions from Lone

Star?

Capital gain recognized on the sale and distribution