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Jack and Jill are owners of UpAHill, an S Corporation. They own $25$ and $75$ percent, respectively. Assume Jack and Jill, $25$ and $75$ percent shareholders, respectively, in UpAHill Corporation, have tax bases in their shares at the beginning of year $1$ of $$24,000$ and $$56,000,$ respectively. Also, assume no distributions were made. Given the income statement below, what are their tax bases in their shares at the end of year $1?$

$\backslash$table$[[\backslash$table$[[$UpAHill Corporation $($an S Corporation$)],[$Income Statement$],[$December $31,$ Year $1$ and Year $2]]],[,$Year $1,$Year $2],[$Sales revenue,$ $175,000,$$ $310,000],[$Cost of goods sold,$(60,000),(85,000)],[$Salary to owners Jack and Jill,$(40,000),(50,000)],[$Employee wages,$(15,000),(20,000)],[$Depreciation expense,$(10,000),(15,000)],[$Miscellaneous expenses,$(7,500),(9,000)],[$Interest income $($unrelated to business$),2,000,2,500],[$Qualified dividend income,$500,1,000],[$Overall net income,$ $45,000,$$ $134,500]]$

$\begin{array}{cc}?& \text{T}\text{a}\text{x}\text{B}\text{a}\text{s}\text{i}\text{s}at\text{t}\text{h}\text{e}\text{e}\text{n}\text{d}of\text{Y}\text{e}\text{a}\text{r}1\\ \text{J}\text{a}\text{c}\text{k}& ?\\ \text{J}\text{i}\text{l}\text{l}& ?\end{array}$

a$.$ What amount of ordinary income and separately stated items are allocated to them for years $1$ and $2$ based on the information

above? Assume that UpAHill Corporation has $$100,000$ of qualified property $($unadjusted basis$)$ in both years.

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