Please Answer All the questions. Thanks

1. During 2020, Michael owns 80% of chili Burgers Inc. a calendar-year S corporation. His son Sonny owns the remaining 20% of the stock. At December 31, 2019, Michaels stock basis is $32,000, and his debt basis is $5,000. During 2020 Chili Burgers makes a $6,400 cash distribution to Michael and a $1,600 cash distribution to Sonny.

A. If Chili Burgers incurs a $60,000 loss for 2020, what amount of the loss can Michael deduct on his individual tax return?

B. What is Michaels stock basis and debt at December 31, 2020?

C. Are any of Michaels losses suspended under the basis rules? If yes, how much of Michaels losses are suspended?

2. At the beginning of the year, the Accumulative Adjustment Account (AAA) of Turquoise Corporation, n S corporation, has a balance of $1,045,000. Turquoises Other Adjustment Account (OAA) has a beginning balance of $60,000. During the year, the following item occur:

Operating income $625,000

Dividend income 12,000

Death benefit received on key officers life insurance policy 250,000

Long-term capital gain from sale of vacant land 28,500

Short-term capital loss from sales of venture, Inc. stock (2,400)

Premium expense on key officers life insurance policy (6,000)

Nondeductible sales tax penalty paid to Nevada (800)

Charitable contribution to the American Red Cross (18,000)

Cash distribution to shareholders 240,000

Compute Turquoise Corporations ending AAA and OAA balances at the end of the year?

3. WhiteAcre Partnership reported the following items of income and deduction during the current tax year:

Revenue $420,000

Cost of sales (190,000)

Rent expense- equipment (12,000)

Tax-exempt interest income 1,800

Salaries to employees (95,000)

Short- term capital loss (8,200)

Charitable contribution to United Way (cash) (5,000)

In addition, the partnership distributed $10,000 of cash each to 50% partner Gloria and 50% partner Holly. What is Glorias share of partnership items that would be reported to her on the Schedule K-1 she receives from WhiteAcre Partnership for the current year?

4. Zee and Jay are forming ZeeJay Partnership. Zee contributes $600,000 cash and Jay contributes land with an adjusted basis of $280,000 and a fair market value of $680,000. The land is subject to a $80,000 recourse liability, which is also transferred into the partnership (assumed) and is shared equally by the partners for basis purposes. Zee and Jay share in all partnership profits and losses equally except for any precontribution gain, which must be allocated according to the statutory rules for built-in gain allocations.

1. What is Zees and Jays adjusted tax basis for their partnership interests immediately after the partnership is formed?
2. If the partnership sells the land contributed by Jay for $750,000, what is the taxable gain allocated to each partner?

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