Required information Problem 22-57 (LO 22-4) (Algo) [The following information applies to the questions displayed below.] Birch Corporation, a calendar-year corporation, was formed three years ago by its sole shareholder, James, who has operated it as an S corporation since its inception. Last year, James made a direct loan to Birch Corporation in the amount of $8,650. Birch Corporation 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 $31,800 business loss. What amount of the loss clears the tax-basis limitation, and what is James's basis in his Birch Corporation stock and Birch Corporation debt in each of the following alternative scenarios? (Leave no answer blank. Enter zero if applicable.) Problem 22-57 Part a (Algo) a. At the beginning of the year, James's basis in his Birch Corporation stock was $50,800 and his basis in his Birch Corporation debt was $8,650. Amount of loss clearing tax basis limitation Basis in stock Basis in debt