Reference no: EM132441777

Question - Suppose that at the beginning of 2019 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 2019, 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? Explain with equations?

a. $0 stock basis, $8,600 debt basis

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

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

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

e. none of these above