On January $1,2022,$ Leo paid $$19,000$ for $5$ percent of the stock in BLS$,$ an S corporation. In November, he loaned $$10,000$ to BLS in

return for a promissory note. BLS generated a $$640,000$ operating loss in $2022.$ BLS generated $$412,000$ ordinary business income in

Required:

a$.$ How much of Leo's share of this income is included in his $2023$ taxable income?

b$.$ Compute Leo's basis in his BLS stock and his BLS note at the end of $2023.$

c$.$ How would your answers to parts a and b change if BLS$\text{'}$s ordinary business income was only $$224,000?$

Complete this question by entering your answers in the tabs below.

Req A and $B$

a$.$ How much of Leo's share of this income is included in his $2023$ taxable income?

b$.$ Compute Leo's basis in his BLS stock and his BLS note at the end of $2023.$