On January 2, 2018, Sean loans his solely-owned S corporation $10,000. By the end of 2018, Seans stock basis is zero, and the basis in his note has been reduced to $8,000 from deducting a flow-through loss greater than his stock basis. During 2019, the companys operating income is $10,000. The company makes distributions to Sean of $8,000 during 2019. Sean reports a(n):

Group of answer choices

a. $2,000 LTCG.

b. Stock basis of $2,000.

c. Loan basis of $10,000.

d. $8,000 LTCG.