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 1 Ms. Mushroom, an individual, purchased a 20 percent interest in Fungi Partnership for $23,000.- Mushroom's Schedule K-1 reported that her share of Fungi's debt at year-end was $26.000, and her share of ordinary loss $44,400. On January 1, Year 2. Ms. Mushroom sold her interest to another partner for $3,400 cash Required: a. How much of her share of Fungi'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 Scorporation instead of a partnership? Complete this question by entering your answers in the tabs below. Required A Required B Required How much of her share of Fungi's loss can Ms. Mushroom deduct on her Year 1 tax return? Deduction Required Required B > du Or a partnership Complete this question by entering your answers in the tabs below. Required A Required Required Compute Ms. Mushroom's recognized gain on sale of her Fungi Partnership interest. Gain recognized