2. A, B, and C form a limited partnership. A and B are general partners, while C is a limited partner. Each contributes $4,000 to the partnership. The partnership borrows $30,000 from a bank for a building, which serves as collateral for the loan. In its first year of operation, the partnership reports a loss of $30,000. How much of this loss can A, B, and C report on their individual tax returns as losses from the partnership?

3. Assume that Mr. Q owns one third of the stock in an S corporation and that the basis in his stock on January 1 is $3,000. In addition, Mr. Q loaned the S corporation $1,000 during the year. The S corporation had ordinary income, before salary payments to Mr. Q of $30,000, capital gain of $4,500, and salary payments to Mr. Q of $45,000 for the current year.

1. How much loss can Mr. Q report from his S corporation?

2. What is the ending basis of Mr. Qs stock?

3. What is the ending basis of Mr. Qs loan to the S corporation?