Magnolia Corp. is a calendar-year S corporation with one sha…
Magnolia Corp. is a calendar-year S corporation with one shareholder, Cristobal. Magnolia incurred the following items in 2024 and 2025: On January 1, 2024, Magnolia had AAA and OAA balances of zero and accumulated E&P of $7,000. Also on January 1, 2024, Cristobal had a $15,000 stock basis and a $14,000 basis in debt he loaned to the corporation. What stock basis and debt basis does Cristobal report at the end of 2024 and 2025? What are the balances in each corporate account (AAA, accumulated E&P, and OAA) at the end of 2024 and 2025? What (pass-through) items does Cristobal report in 2024 and 2025?
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