A calendar year S corporation has the following information for two years:

	2020	2021
Net ordinary income (or loss)	$(50,000)	$10,000
Dividend income	5,000	2,000

X, an unmarried 60% shareholder, has a basis in the stock on January 1, 2020, of $18,000 and a note receivable from the corporation for $12,000. X's only other income is salary from an unrelated business.

a. Calculate X's basis in the stock and in the note after the above income and loss are recorded for 2020.

b. Calculate X's basis in the stock and in the note after the above income items are recorded for 2021.

c. Assume the corporation paid the $12,000 note on April 3, 2021. Calculate X's basis in the stock after the above income distributions are recorded for 2021, and calculate the effect on X's adjusted gross income for all 2021 items, including the payment of the note.