Suppose at the beginning of 2015, Jamaal\'s basis in his S corporation stock is

Question

Suppose at the beginning of 2015, Jamaal's basis in his S corporation stock is $1,300, and he has a $10,300 debt basis associated with a $10,300 loan he made to the S corporation. In 2015, Jamaal's share of S corporation income is $4,300, and he received a $7,300 distribution from the S corporation. What is Jamaal's stock and debt basis after these transactions?

None of these.

$5,600 stock basis; $3,000 debt basis.

$5,600 stock basis; $10,300 debt basis.

$0.0 stock basis; $8,600 debt basis.

$0 stock basis; $10,300 debt basis.

Explanation / Answer

correct option is "B"

Stock basis = 5600                 [1300+4300]

Debt basis = 10300  

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