McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 39

{Research} In the past several years, Shakira had loaned money to Shakira Inc.(an S corporation) to help the corporation keep afloat in a downturn.Her stock basis in the S corporation is now zero, and she had deducted $40,000 in losses that reduced her debt basis from $100,000 to $60,000.Things appear to be turning around this year, and Shakira Inc.repaid Shakira $20,000 of the $100,000 outstanding loan.What is Shakira's income, if any, on the partial loan repayment?