QUESTIONS Birch Corp., a calendar-year corporation was formed three years ago by its sole shareholder, James, who has operated it as an corporation since its inception. Last year, James made a direct loan to Birch Corp. In the amount of $5,000. Birch Corp. has paid the interest on the loan but has not yet paid any principal. (Assume the loan qualifies as debt for tax purposes.) For the year, Birch experienced a $20,000 business loss. At the beginning of the year, James's basis in his Birch Corp. stock was $8,000 and his basis in his Birch Corp. debt was $5,000. What amount is the amount of suspended loss at the end of the year? QUESTION 6 In the past several years, Shakira had loaned money to Shakira Inc. (an S corporation) to help the corporation keep afloat in a downturn. Her stock basis in the corporation is now zero, and she had deducted $50,000 in losses that reduced her debt basis from $100,000 to $50,000. Things appear to be turning around this year, and Shakira Inc. repaid Shakira $20,000 of the $100,000 outstanding loan What is Shakira's income, if any, on the partial loan repayment? QUESTION 7 Adam Fleeman, a skilled carpenter, started a home improvement business with Tom Collins, a master plumber. Adam and Tom are concerned about the payroll taxes they will have to pay. Assume they form an Scorporation, and each earns a salary of $70,000 from the corporation in addition, they expect their share of business profits to be $60,000 each. How much combined Social Security tax and Medicare tax (Employee Rate-7.65%, Employer Rate 7.65%) will Adam and the corporation have to pay on his salary and profits