Suppose Clampett, Incorporated, Terminated Its S Election on August 28

question 56

Multiple Choice

Suppose Clampett, Incorporated, terminated its S election on August 28, 2020. At the end of the S corporation's short tax year ending on August 28, J.D.'s stock basis and at-risk amounts were both zero (he has never had debt basis) , and he had a suspended loss of $20,450. In 2021, J.D. made additional capital contributions of $5,450 on March 15 and $13,350 on September 20. How much loss may J.D. deduct in 2021?

• A)$0
• B)$5,450
• C)$18,800
• D)$20,450
• E)None of the choices are correct.

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Definitions:

Government Economic Policy

The strategies and measures employed by a government to manage its economy, including taxation, spending, and interest rate settings.

Keynesian Approach

A macroeconomic theory that emphasizes the role of government intervention in stabilizing the economy and managing aggregate demand.

Great Depression

A severe worldwide economic downturn that took place during the 1930s, characterized by widespread unemployment, deflation, and a significant decline in economic activity across the globe.

Unemployment

The situation where individuals who are capable of working and are actively seeking work are unable to find employment.