Suppose at the beginning of 2018, Jamaal's basis in his S corporation stock is $0, he has a $0 debt basis associated with a $10,500 loan he made to the S corporation and a $5,500 suspended loss from the S corporation. In 2018, Jamaal contributed $8,500 to the S corporation, and the S corporation had ordinary income of $4,500. Assume that Jamaal owns 40% of the S corporation. How much net income or loss does Jamaal report this year from the S corporation?

Multiple Choice

• $4,500 income.

• $1,800 income.

• $1,000 loss.

• $3,700 loss.

• None of the choices are correct.