Jessica is a one-third owner in Bikes-R-Us, an S corporation that experienced a $49,800 loss this year (year 1). Assume her stock basis is $11,920 at the beginning of the year and that at the beginning of year 1 Jessica loaned Bikes-R-Us $3,480. In year 2, Bikes-R-Us reported ordinary income of $12,960. (Leave no answer blank. Enter zero if applicable.)

Required:

1. What amount is Jessica allowed to deduct in year 1?
2. What are her stock and debt bases in the corporation at the end of year 1?
3. What are her stock and debt bases in the corporation at the end of year 2?