Suppose at the beginning of 2015, Jamaal's basis in his S corporation stock is $1,300, and he has a $10,300 debt basis associated with a $10,300 loan he made to the S corporation. In 2015, Jamaal's share of S corporation income is $4,300, and he received a $7,300 distribution from the S corporation. What is Jamaal's stock and debt basis after these transactions?
None of these.
$5,600 stock basis; $3,000 debt basis.
$5,600 stock basis; $10,300 debt basis.
$0.0 stock basis; $8,600 debt basis.
$0 stock basis; $10,300 debt basis.