A Calendar Year C Corporation Reports a $41,000 NOL in 2019

question 108

Multiple Choice

A calendar year C corporation reports a $41,000 NOL in 2019, but it elects S status for 2020 and generates an NOL of $30,000 in that year. At all times during 2020, 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 2020. How much of the 2020 loss, if any, can she deduct?

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

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Definitions:

Vertical Specialization

The process of dividing work and responsibilities within an organization or industry based on levels or stages of expertise, focusing on specific functions or processes.

Chain of Command

The formal line of authority, communication, and responsibility within an organization.

Span of Control

The number of subordinates or direct reports that a manager or leader has authority over, affecting management efficiency and organizational structure.

Horizontal Specialization

The division of work in an organization into specialized tasks or roles that are at the same hierarchical level, promoting expertise in specific areas.