Suppose at the beginning of 2017, Jamaal's basis in his S corporation stock is $1,000, and he has a $10,000 debt basis associated with a $10,000 loan he made to the Scorporation. In 2017, Jamaal's share of S corporation income is $4,000, and he received a$7,000 distribution from the S corporation. How much income does Jamaal report in2017 from these transactions?
A) $7,000.
B) $0.
C) $6,000.
D) $4,000.
E) None of the choices are correct.
Correct Answer:
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