Stephanie Owns a 25% Interest in a Qualifying S Corporation

Multiple Choice

Stephanie owns a 25% interest in a qualifying S corporation.Stephanie's basis in the stock was $40,000 at the end of the year after adjustments are made for capital contributions and distributions (but not operating results) .Stephanie also loaned the S corporation $10,000 this year.The S corporation incurred a $240,000 ordinary loss this year.Assume that next year the S corporation's ordinary income is $160,000.Stephanie's basis in her stock at the end of next year is

A) $10,000.
B) $20,000.
C) $30,000.
D) $40,000.