On January 2,2009,David Loans His S Corporation $10,000

On January 2,2009,David loans his S corporation $10,000.By the end of 2009,David's stock basis is zero,and the basis in his note has been reduced to $8,000.During 2010,the company's operating income is $10,000.The company also makes distributions to David of $8,000.Which statement is correct?

A) Loan basis is now $10,000.
B) $8,000 LTCG.
C) Stock basis is $2,000.
D) $2,000 LTCG.
E) None of the above statements is correct.