Suppose That at the Beginning of 2020 Jamaal's Basis in His

question 26

Multiple Choice

Suppose that at the beginning of 2020 Jamaal's basis in his S corporation stock was $28,000 and Jamaal has directly loaned the S corporation $9,990. During 2020, the S corporation reported an $80,100 ordinary business loss and no separately stated items. How much of the ordinary loss is deductible by Jamaal if he owns 50percent of the S corporation?

• A) $9,990
• B) $28,000
• C) $37,990
• D) $40,050
• E) None of the choices are correct.

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Definitions:

Supply Curve

A graphical representation that shows the relationship between the price of a good or service and the quantity of that good or service that a supplier is willing and able to supply to the market.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay, representing the benefit to consumers.

Allocative Efficiency

A state of the economy in which production represents consumer preferences; every good or service is distributed to meet the desires of consumers.

Consumer Surplus

Consumer surplus is the difference between the total amount that consumers are willing and able to pay for a good or service versus the total amount that they actually do pay.