Suppose that at the beginning of 2019 Jamaal's basis in his S corporation stock is $0, he has a $0 debt basis associated with a $20,000 loan he made to the S corporation, and he has a $15,000 suspended loss from the S corporation. In 2019, Jamaal contributed $18,000 to the S corporation, and the S corporation had ordinary income of $14,000. Assume that Jamaal owns 40 percent of the S corporation. How much net income or loss does Jamaal report this year from the S corporation?

Multiple Choice

• a). $5,600 income.

• b). $9,400 loss.

• c). $1,000 loss.

• d). $14,000 income

• e). None of the choices are correct.