William is the sole shareholder of Tremer, Inc., a calendar-year S corporation. The basis of William's stock at January 1, 20X7, is $15,000. Tremer, Inc, shows the following for the taxable year ending December 31, 20X1 1. Short-term capital gain 4,0o0 2. Tax penalties 3. Taxable loss 4. Section 1231 loss $1,000 $ 12,000 $ 2.000 What is the basis of William's stock at December 31, 20x1? A. $4,000 B. $7,000 C. $12,000 D. $18,000