11-26 Net Income/Loss and Basis. For the current year, an S corporation reported an ordinary loss of $100,000, a net capital loss of $10,000, and a 1231 gain of $20,000. M owns 10% of the stock and at the beginning of the year had a basis in her stock of $7,500. In addition, M loaned the corporation $5,000 during the year. She materially participates in the S corporation. A) Compute her deductible loss. B) The following year, the corporation reported ordinary income of $70,000 and made no distributions. How does this income affect M's basis in the stock and the debt?