Question
73.Suppose at the beginning of 2015, Jerry's basis in his S corporation stock is $0, he has a $0 debt basis associated with a $10,000
73.Suppose at the beginning of 2015, Jerry's basis in his S corporation stock is $0, he has a $0 debt basis associated with a $10,000 loan he made to the S corporation and a $5,000 suspended loss from the S corporation. In 2015, Jerry contributed $8,000 to the S corporation, and the S corporation had ordinary income of $4,000. Assume that Jerry owns 40% of the S corporation. What is Jerry's stock and debt basis at the end of 2015?
A. $0 stock basis; $4,600 debt basis.
B. $0 stock basis; $9,600 debt basis.
C. $4,600 stock basis; $0 debt basis.
D. $9,600 stock basis; $0 debt basis.
E. None of these.
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