Money, Inc., a calendar year S corporation in Denton, Texas, has two unrelated shareholders, each owning 50% of the stock. Both shareholders have a $400,000 stock basis as of January 1, 2015. At the beginning of 2015, Money has an AAA of $300,000 and AEP of $600,000. During 2015, Money has operating income of $100,000. At the end of the year, Money distributes securities worth $1 million, with an adjusted basis of $800,000. Determine the tax effects of these transactions.
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