1. A 20% shareholder began the year with an adjusted basis of $200,000 in a S corporation. During the year, the corporation had ordinary income of $180,000, a capital gain of $20,000, a capital loss of $35,000, muni-bond interest of $10,000, other interest income of $20,000, $10,000 of meals expense were disallowed, and the shareholder received a $40,000 cash distribution. Calculate year-end basis.

   1. $0

   2. $197,000

   3. $237,000

   4. $345,000