Suppose that at the beginning of 2021 Jamaal's basis in his S corporation stock is...
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Accounting
Suppose that at the beginning of 2021 Jamaal's basis in his S corporation stock is $1,050 and he has a $12,000 debt basis associated with a $12,000 loan he made to the S corporation. In 2021, Jamaal's share of S corporation income is $6,000, and he received a $9,000 distribution from the S corporation. What is Jamaal's stock and debt basis after these transactions?
Multiple Choice
$0 stock basis; $10,050 debt basis
$0 stock basis; $12,000 debt basis
$7,050 stock basis; $12,000 debt basis
$7,050 stock basis; $3,000 debt basis
None of the choices are correct.
Please give a detailed explanation. Thank you
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