On January 2, 2013, Tim Loans His S Corporation $10,000

On January 2, 2013, Tim loans his S corporation $10,000. By the end of 2013, Tim's stock basis is zero, and the basis in his note has been reduced to $8,000. During 2014, the company's operating income is $10,000. The company makes 2014 distributions to Tim of $8,000. Tim reports a(n) :

A) $2,000 LTCG.
B) $8,000 LTCG.
C) Stock basis of $2,000.
D) Loan basis of $10,000.