How do account for it?

[Questionguy101]

A S-corp had 2 shareholders (Y and Z). The S-corp holds a rental property. In 2015, Y bought the 50% shares of Z and became the 100% owner of the S-corp. Y then paid Z by getting a mortgage from the rental property.

Since Y had used an asset of the S-corp to get a mortgage in order to buy Z's shares, is the mortgage amount considered a loan or distribution by the S-corp to him?

[Questionguy101]

The way I see the scenario is that the S-Corp had borrowed a mortgage from the rental property. And then it has either distributed or lent the mortgage proceeds to Y who used the funds to buy Z's shares.

Does anyone see it the same or differently?