Pablo owns 30% of Cancun Company, an electing S crporation. Pablo's adjusted basis in the stock is$44,000 at the beginning of the current year. During the current year, Cancun distributes a $60,000 divident. Cancun Compnay reports a $200,000 operating loss for the current year. If Pablo is not a material participant in Cancun Company and has no other passive activity income, How much of a loss can he deduct on his income tax return?

a. $-0-

b. $18,000

c. $26,000

d. $44,000

e. $60,000