Regula, Leonel, and Aggripina each own 100 shares of Cudgel, Inc., an S corporation that was a C corporation several years ago. While Regula and Leonel actively participate in running the company, Aggripina has a separate day job and is a passive owner. Consider the following information for 2022 : Part1 As of January 1, 2022, Regula, Leonel, and Aggiipina each has a basis in Cudgel stock of $10,000 and a debt basis of $5,000. These loans are shareholder loans and cash were actuallly addvanced to the corporation. On January 1 , the stock basis is also the at-risk amount for each shareholder. Leonel and Aggripina also are passive owners in Pangloss LLC, which allocated business income of $10,000 and related passive expenses of $20,000 to each of them in 2022. Neither has any other source of passive income (besides Cudgel, for Aggripina). On March 31, 2022, Regula lends $7,500 of her own money to Cudgel. Anticipating the need for basis to deduct a loss, on April 4, 2022, Leonel takes out a $20,000 loan to make a $20,000 capital contribution to Cudgel. Leonel uses his automobile ( $70,000 fair market value) as the sole collateral for his loan (nonrecourse). Cudgel has an accumulated adjustments account balance of $105,000.00 as of January 1,2022. Cudgel has C corporation earnings and profits of $45,000 as of January 1,2022. During 2022, Cudgel reports a business loss of ($120,000), computed as follows: Cudgel also reported $12,000 of tax-exempt interest income. $2500 of Dividends $3000 of Taxable interest $2500 of Investment Expenses (\$500 allocable to Tax exempt interest) What amount of Cudgel's 2022 business loss of $120,000 are Regula, Leonel, and Aggripina allowed to deduct on their individual tax returns? What are each owner's stock basis and debt basis (if applicable) and each owner's at-risk amount with respect to the investment in Cudgel at the end of 2022 ? Part II During 2023, Cudgel made several changes to its business approach and reported $18,000 of business income, computed as follows: - Cudgel also reported a long-term capital gain of $24,000 in 2023. - Cudgel made a cash distribution on July 1,2023 , of $20,000 to each shareholder. What amount of gain/income does each shareholder recognize from the cash distribution on July 1, 2023? Prepare a Form 1120-S for Cudgel for 2023 Don't worry about the balance sheet