Support your answers with calculations, as needed. •Problems 1. Jack and Jill are owners of UpAHill, an S corporation. They own 25 and 75 percent, respectively. a. What amount of ordinary income and separately stated items are allocated to them for years 1 and 2 based on the information above? b. Complete UpAHill’s Form 1120S, Schedule K, for year 1. c. Complete Jill’s 1120S, Schedule K-1, for year 1. 2. Assume Jack and Jill, 25 and 75 percent shareholders 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 above, what are their tax bases in their shares at the end of year 1? •Discussion Questions 3. Identify the features common to the gift tax formula and the estate tax formula. 4. Explain why Congress felt it necessary to enact a gift tax to complement the estate tax. 5. Describe the unified credit and the purpose it serves in the gift and estate tax.