Suppose at the beginning of 2014, Jamaal's basis in his S corporation stock is $0,...
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Accounting
Suppose at the beginning of 2014, Jamaal's basis in his S corporation stock is $0, he has a $0 debt basis associated with a $10,000 loan he made to the S corporation and a $5,000 suspended loss from the S corporation. In 2014, Jamaal contributed $8,000 to the S corporation, and the S corporation had ordinary income of $4,000. Assume that Jamaal owns 40% of the S corporation. How much net income or loss does Jamaal report this year from the S corporation? A. $4,000 income. B. $1,600 income. C. $1,000 loss. D. $3,400 loss. E. None of these.
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