A Calendar Year C Corporation Reports a $41,000 NOL in 2012,but

question 22

Multiple Choice

A calendar year C corporation reports a $41,000 NOL in 2012,but it elects S status for 2013 and generates an NOL of $30,000 in that year.At all times during 2013,the stock of the corporation was owned by the same 10 shareholders,each of whom owned 10% of the stock.Kris,one of the 10 shareholders,holds an S stock basis of $2,300 at the beginning of 2013.How much of the 2013 loss,if any,is deductible by Kris?

• A)$0.
• B)$2,300.
• C)$3,000.
• D)$7,100.

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Definitions:

Supplies Account

An account used in accounting to track the cost of supplies spent over a specific period.

Accumulated Depreciation

The cumulative depreciation expense charged on a fixed asset throughout its useful life.

Contra-Liability

A liability account that is used to reduce the value of a related liability, not commonly used in accounting terminology.