Bob contributed $7,000 of cash to BF Inc., a newly created S corporation for federal income tax purposes, and made a loan of $2,000 to BF Inc. During Year 1, BF Inc. generated ordinary income of $8,200 and tax exempt income of $2,000. Cash of $17,300 was distributed immediately prior to the end of Year 1. Bob is a single shareholder. No repayment was made to the loan and no interest was accrued to the loan.
State types and amounts of basis that Joe has in BF Inc. upon contribution