Calculate both owners “at risk” basis at year end for both years, showing all your work (1) first assuming the entity is a partnership and (2) second assuming it is a S Corporation.

In the first year, as is typical, the business struggled and incurred ordinary operating income of $50,000, excluding the payment promised to Don of $65,000 annually for his labor.

The business earned interest income of $2000, a short term capital loss of $4000, and made qualified charitable contributions of $1000.

Calculate both owners “at risk” basis at year end for both years, showing all your work (1) first assuming the entity is a partnership and (2) second assuming it is a S Corporation.