1. in the past several years, Shakira had loaned money to Shakira Inc. (an S corporation) to help the corporation keep afloat in a downturn. Her stock basis in the S corporation is now zero, and she had deducted $60,000 in losses that reduced her debt basis from $100,000 to $40,000. Things appear to be turning around this year, and Shakira Inc. repaid Shakira $20,000 of the $100,000 outstanding loan. What is Shakiras income, if any, on the partial loan repayment?

1. Adam Fleeman, a skilled carpenter, started a home improvement business with Tom Collins, a master plumber. Adam and Tom are concerned about the payroll taxes they will have to pay. Assume they form an S corporation, and each earns a salary of $75,000 from the corporation; in addition, they expect their share of business profits to be $60,000 each. How much combined Social Security tax and Medicare tax (Employee Rate=7.65%; Employer Rate=7.65%) will Adam and the corporation have to pay on his salary and profits?