Waverly, a single taxpayer, is an S corporation shareholder and materially participates in the business. In the current year, Waverly's share of losses is $325,000. Waverly also received a salary from the corporation of $80,000. At the beginning of the year, Waverly had a basis in the S corporation stock of $500,000. Which of the following statements regarding how much excess business loss Waverly has is true? 

a. Waverly can use the entire amount of the share at the beginning of the year. Waverly's excess business loss is $500,000. 

b. Waverly can use $250,000 of the $325,000 loss against other nonbusiness income. Waverly's excess business loss is $75,000. 

c. Waverly can use $250,000 of the $325,000 loss against other nonbusiness income. Waverly's excess business loss is $250,000. 

d. Waverly is not entitled to an excess business loss under these circumstances. 

e. Waverly can use the $325,000 loss against other nonbusiness income. Waverly's excess business loss is $325,000.