Business, 24.06.2021 20:10 Aviannakelly

Assume Jack and Jill, 25 and 75 percent shareholders in UpAHill Corporation, have tax bases in their shares at the beginning of year 1 of $24,000 and $56,000, respectively. UpAHill Corporation (an S Corporation)
Income Statement
December 31, year 1 and year 2
Year 1 Year 2
Sales revenue $ 175,000 $ 310,000
Cost of goods sold (60,000 ) (85,000 )
Salary to owners Jack and Jill (40,000 ) (50,000 )
Employee wages (15,000 ) (20,000 )
Depreciation expense (10,000 ) (15,000 )
Miscellaneous expenses (7,500 ) (9,000 )
Interest income 2,000 2,500
Dividend income 500 1,000
Overall net income $ 45,000 $ 134,500
Also assume no distributions were made. Given the income statement above, what are their tax bases in their shares at the end of year 1?

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Assume Jack and Jill, 25 and 75 percent shareholders in UpAHill Corporation, have tax bases in their...

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