King-of-the-Universe Corporation develops and sells a large variety of popular software for personal computers. It distributes a 100,000 sq. ft. manufacturing facility to its CEO, who will convert it to a guest cottage. The corporation has sufficient E&P for the distribution to be treated as a dividend. The facility has a FMV of $2 million and a basis in the hands of the corporation of $25 million. What will be the basis in the hands of the CEO and what amount of loss will the corporation be able to claim?