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. 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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UpAHill Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 Year 1 Year 2 $175,000 $310,000 Sales revenue (60,000) Cost of goods sold (85,000) Salary to owners Jack and Jll Employee wages (40,000) (50,000) (15,000) (10,000) (20,000) Depreciation expense Miscellaneous expenses (15,000) (7,500) (9,000) Interest income 2,000 2,500 Dividend income 500 1,000 $ 45,000 $134,500 Overall net income