LO.6 Senior, Ltd., acquires all of the stock of JuniorCo for $30,000,000 at the beginning of year 1. The group immediately elects to file income tax returns on a consolidated basis. Seniors operations generate a $50,000,000 profit every year. In year 2, JuniorCo pays its parent a $9,000,000 dividend. Operating results for JuniorCo are as follows. Compute Seniors basis in the JuniorCo stock as of the end of years 1, 2, and 3. All tax years occur after 2017.

Tax Year Taxable Income

1 $ 4,000,000

2 $12,000,000

3 $15,000,000