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Problem $22-57($LO $22-4)($Algo$)$

$[$The following information applies to the questions displayed below.$]$

Birch Corporation, a calendar$-$year corporation, was formed three years ago by its sole shareholder, James, who has operated it as an S corporation since its inception. Last year, James made a direct loan to Birch Corporation in the amountof $$7,450.$ Birch Corporation has paid the interest on the loan but has not yet paid any principal. $($Assume the loan qualifies as debt for tax purposes.$)$ For the year, Birch experienced a $$34,200$ business loss.

What amount of the loss clears the tax$-$basis limitation$,$ and what is James's basis in his Birch Corporation stock and Birch Corporation debt in each of the following alternative scenarios?

Note: Leave no answer blank. Enter zero if applicable.

Problem $22-57$ Part c $($Algo$)$

c$.$ At the beginning of the year, James's basis in his Birch Corporation stock was $$0$ and his basis in his Birch Corporation debt was $$7,450.$

$\backslash$table$[[$Amount of loss clearing tax basis limitation$,],[$Basis in stock,$],[$Basis in debt,$]]$