Suppose That at the Beginning of 2020 Jamaal's Basis in His

Multiple Choice

Suppose that at the beginning of 2020 Jamaal's basis in his S corporation stock is $0, he has a $0 debt basis associated with a $16,500 loan he made to the S corporation, and he has a $11,500 suspended loss from the S corporation. In 2020, Jamaal contributed $14,500 to the S corporation, and the S corporation had ordinary income of $10,500. Assume that Jamaal owns 40percent of the S corporation. How much net income or loss does Jamaal report this year from the S corporation?

A) $10,500 income
B) $4,200 income
C) $1,000 loss
D) $7,300 loss
E) None of the choices are correct.