Emma Owns 40% of Johnson, Inc

question 74

Multiple Choice

Emma owns 40% of Johnson, Inc., a regular C corporation, that reported a net loss of $50,000 for the year.Emma acquired her stock on January 1 of the current year by investing $4,000 cash.In July, the corporation took out a bank loan for $25,000.How much of the loss can Emma deduct on her tax return for the year?

• A)$0
• B)$4,000
• C)$9,000
• D)$10,000

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Definitions:

Prices

The amount of money expected, required, or given in payment for goods or services.

Budget Line

An illustrated chart detailing every possible pair of two items that could be acquired given a certain financial limit at fixed prices.

Price of A

Represents the amount of money required to purchase a specific item or service A.