1. Suppose at the beginning of 2016, Jamals basis in his S corporation stock was $27,000 and that Jamal has loaned the S corporation $10,000. During 2016, the S corporation reported an $80,000 ordinary business loss and no separately stated items. How much of the ordinary loss, is deductible by Jamal if he owns 50% if the S corporation?

1. None of these
2. $40,000
3. $37,000
4. $27,000
5. $10,000