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 year2 Year 1 Year 2 Sales Revenue $175,000 $310,000 Cost of Goods Sold Salary to owners Jack and Jill Employee Wages Depreciation Expense Miscellaneous Expenses Interest income Dividend Income Overall Net Income (60,000) (40,000) (15,000) (10,000) (7,500) 2,000 500 $45000 (85,000) (50,000) (20,000) (15,000) (9,000) 2,500 .000