Joe contributed $7,000 of cash to JS Inc., a newly created S corporation for federal income tax purposes, and made a loan of $2,000 to JS Inc. During Year 1, JS Inc. generated ordinary income of $8,200 and tax exempt income of $2,000. Cash of $17,300 was distributed immediately prior to the end of Year 1. Joe is a single shareholder. No repayment was made to the loan and no interest was accrued to the loan.

1. 1. State types and amounts of basis that Joe has in JS Inc. upon contribution Joe basis would
2. 2. Compute AAA and OAA and explain the relationship between AAA/OAA and basis.
   3. State types and amounts of basis that Joe has in JS Inc. at year-end and potential tax consequence(s