Bill and Ken own Tax, Inc.(an S corporation)equally. In 2004, the corporation reported a $130,000 ordinary loss. Tax Inc.'s liabilities at the end of 2004 included $100,000 of accounts payable, $150,000 of mortgages payable, and a $20,000 note owned to Bill. Each owner has a $40,000 adjusted basis for his stock on January 1, 2004. Compute the loss reportable by Bill.
a. $65,000
b. $60,000
c. $40,000
d. none of the answers are correct