Problem: Module 7 Textbook Problem 9 Learning Objectives: - 7-6 Adjust the tax basis in a partnership interest - 7-7 Apply the basis limitation on the deduction of partnership losses - 7.9 Identify similarities and differences in the tax treatment of S corporations versus partnerships At the beginning of Year 1Ms. Mushroom, an individual, purchased a 20 percent interest in Fungi Partnership for $24,000. Ms. Mushroom's Schedule K-1 reported that her share of Fungi's debt at year-end was $18,000, and her share of ordinary loss was $37,200. On January 1, Year 2, Ms. Mushroom sold her interest to another partner for $2,600 cash. Required: a. How much of her share of Fungl's loss can Ms. Mushroom deduct on her Year 1 tax return? b. Compute Ms. Mushroom's recognized gain on sale of her Fungi Partnership interest. c. How would your answers to parts a and b change if Fungi were an $ corporation instead of a partnership? Complete this question by entering your answers in the tabs below