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Business, 06.05.2020 06:25 andersonkee2657

On January 2, 2016, Tim loans his S corporation $10,000. By the end of 2018, Tim's stock basis is zero, and the basis in his note has been reduced to $8,000. During 2019, the company's operating income is $10,000. The company makes 2019 distributions to Tim of $8,000. Tim reports a(n):

a. $2,000 LTCG.
b. $8,000 LTCG.
c. Stock basis of $2,000.
d. Loan basis of $10,000.

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