Birch Corp., 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 Corp. in the amount of $7,050. Birch Corp. 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 $34,300 business loss. What amount of the loss clears the tax basis limitation, and what is James's basis in his Birch Corp. stock and Birch Corp. debt in each of the following alternative scenarios? a. At the beginning of the year, James's basis in his Birch Corp. stock was $45,200 and his basis in his Birch Corp. debt was $7,050. Amount of loss clearing tax basis limitation Basis in stock Basis in debt