Katrina was an S corporation shareholder. After her initial contributions, she had the following tax bases:

1) Basis in stock: $50,000

2) Basis in personal loan to S corp: $20,000

Over the first two years of the corporation's existence, the corporation experienced significant operating losses and Katrina's pass-through share of these was $60,000. Katrina materially participated in the S corporation's business.

Which of the following statements regarding Katrina's tax situation is false?

Question options:

	These were deductible losses to Katrina
	Katrina could deduct only $50,000 of the pass through losses. The remaining $10,000 was suspended.
	After these losses, Katrina had a $0 basis in stock and a $10,000 basis in loan