Trader Shoe (Shoe), a premium shoe manufacturer, has had both good and bad years in the past. As of the beginning of this year, its financial statements show a deficit in retained earnings. This year has been very profitable. To share its profits, on December 31, Shoe distributes $200,000 cash and real property worth $300,000 (adjusted basis $20,000) to its two shareholders, Nike Corporation and Tom, respectively. The property is subject to a $100,000 mortgage which Tom assumes. Given the lack of retained earnings, the distribution is reported as a liquidating distribution in the financial statements, reducing Shoes paid-in capital. What tax consequences will the distribution have on the shareholders? On what will those consequences depend?