Which of the following statements is correct in the case where a shareholder in an S corporation makes a loan to the corporation?
a. None of the answer choices are correct.
b. The shareholder's adjusted basis in the corporate stock is increased by the amount of the loan.
c. The shareholder's adjusted basis in the S corporation is effectively increased by the amount of the loan.
d. The shareholder's adjusted basis in the S corporation is effectively increased by their proportionate share of the loan.