Extracted text: 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? UpAHill Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 Year 1 Year 2 $ 175,000 (60,000) ( 40,000) (15,000) (10,000) (7,500) 2,000 $ 310,000 ( 85,000) ( 50,000) (20,000) (15,000) (9,000) 2,500 1,000 Sales revenue Cost of goods sold Salary to owners Jack and Jill Employee wages Depreciation expense Miscellaneous expenses Interest income (related to business) Qualified dividend income 500 Overall net income $ 45,000 $ 134,500 Tax Basis at the end of Year 1 Jack Jill