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On January 1. Year 1, Ginger, an individual, paid $18,000 for 5 percent of the stock in Root Corp, an s corporation. In November Year

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On January 1. Year 1, Ginger, an individual, paid $18,000 for 5 percent of the stock in Root Corp, an s corporation. In November Year 1, he loaned $9,000 to Root Corp. in return for a promissory note. Root Corp, generated a $630,000 operating loss in Year 1. Root Corp, generated $411,000 ordinary business income in Year 2. Required: a. How much of Ginger's share of this income is included in his Year 2 taxable income? b. Compute Ginger's basis in his Root Corp. stock and his Root Corp. note at the end of Year 2. c. How would your answers to parts a and b change if Root Corp.s ordinary business income was only $223,000? Complete this question by entering your answers in the tabs below. Reg A and B Reg C a. How much of Ginger's share of this income is included in his Year 2 taxable income? b. Compute Ginger's basis in his Root Corp. stock and his Root Corp. note at the of Year 2 Amount Taxable income Adjusted basis Root Stock Root Note REGARD Reqc > On January 1. Year 1, Ginger, an individual, pald $18,000 for 5 percent of the stock in Root Corp., an corporation. In November Year 1, he loaned $9,000 to Root Corp. in return for a promissory note. Root Corp. generated a $630,000 operating loss in Year 1. Root Corp. generated $411,000 ordinary business income in Year 2. Required: a. How much of Ginger's share of this income is included in his Year 2 taxable income? b. Compute Ginger's basis in his Root Corp. stock and his Root Corp. note at the end of Year 2. c. How would your answers to parts a and b change if Root Corp's ordinary business income was only $223,000? Complete this question by entering your answers in the tabs below. Reg A and B Regc How would your answers to parts a and change if Root Corp.'s ordinary business Income was only $223,000? Amount Taxable incomo Adjusted basis Root Stock Root Note

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