Question: On January 2 , 2 0 2 2 , Cherie loans her S corporation $ 1 0 , 0 0 0 . By the end

On January 2,2022, Cherie loans her S corporation $10,000. By the end of 2022, Cherie's stock basis is zero, and the basis in her note has been reduced to $8,000. The company also makes distributions to Cherie of $8,000. Which of the following statements is true?
a. The loan basis is now $8,000.
b. There is an $8,000 LTCG.
c. The stock basis is $2,000.
d. The loan basis is now $10,000.
e. There is a $2,000 LTCG.

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