! Required information [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 $7,050. 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 $34,300 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? Note: Leave no answer blank. Enter zero if applicable. b. At the beginning of the year, James's basis in his Birch Corporation stock was $9,650 and his basis in his Birch Corporation debt was $7,050. Amount of loss clearing tax basis limitation Basis in stock Basis in debt