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On January 1, Year 1, Ginger, an individual paid $26,000 for 6 percent of the stock in Root Corp. an corporation, in November Year 1

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On January 1, Year 1, Ginger, an individual paid $26,000 for 6 percent of the stock in Root Corp. an corporation, in November Year 1 he loaned $10,000 to Root Corp. In return for a promissory note. Root Corp generated a $710,000 operating loss in Year 1. Root Corp generated $419,000 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 $231,000? Complete this question by entering your answers in the tabs below. Reg A and B Reac 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. Amount Taxable income Adjusted basis Root Stock Root Note ReqC > On January 1. Year 1, Ginger, an individual, paid $26,000 for 6 percent of the stock in Root Corp., an S corporation in November Year 1, he loaned $10,000 to Root Corp. In return for a promissory note. Root Corp. generated a $710,000 operating loss in Year 1. Root Corp. generated $419,000 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 $231,000? Complete this question by entering your answers in the tabs below. Req A and B Reqc How would your answers to parts a and b change if Root Corp. 's ordinary business Income was only $231,000? Amount Taxable income Adjusted basis Root Stock Root Note Reg A and B

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