Jay is the sole shareholder of James Inc. an S corporation. In 20x1, the S corporation has taxable income of $40,000. Jay's stock basis at January 1st 20x1 is $10,000. In 20x2, James Inc had a loss of $60,000. Which of the following results in 20x2?

A) Jay has a stock basis of negative $10,000

B) Jay has a stock basis of $50,000

C) Jay reports a 20X2 loss of $50,000

D)Jay reports a 20X2 loss of $60,000