Suppose at the Beginning of 2017, Jamaal's Basis in His

question 88

Multiple Choice

Suppose at the beginning of 2017, Jamaal's basis in his S corporation stock was $27,000 and that Jamaal has directly loaned the S corporation $10,000. During 2017, the S corporation reported an $80,000 ordinary business loss and no separately stated items. After any loss deductions this year, what is Jamaal's stock and debt basis at the end of the year if Jamaal is a 50% shareholder of the S corporation?

• A) $67,000 stock basis; $10,000 debt basis.
• B) -$13,000 stock basis; $10,000 debt basis.
• C) $27,000 stock basis; 10,000 debt basis.
• D) $0 stock basis; $10,000 debt basis.
• E) None of the choices are correct.

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Definitions:

Secondary Emotion

Emotions that are not primary and arise from the cognitive appraisal of a situation, often involving a combination of primary emotions and thought processes.

Background Emotion

Pertains to the subtle, persistent emotional states that are not the focal point of consciousness but influence mood and perception.

Secondary Emotion

An emotion that develops from primary emotions, involving a more complex mental processing, such as guilt, shame, or pride.

Delight

A high degree of pleasure or enjoyment that surprises or greatly pleases someone.