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

question 154

Multiple Choice

Suppose that at the beginning of 2020 Jamaal's basis in his S corporation stock was $27,000 and Jamaal has directly loaned the S corporation $10,000. During 2020, the S corporation reported an $80,000 ordinary business loss and no separately stated items. How much of the ordinary loss is deductible by Jamaal if he owns 50 percent of the S corporation?

• A)$10,000
• B)$27,000
• C)$37,000
• D)$40,000
• E)None of the choices are correct.