Suppose Clampett, Inc

question 61

Multiple Choice

Suppose Clampett, Inc. terminated its S election on August 28, 2018. 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 $20,000. In 2019, J. D. made additional capital contributions of $5,000 on March 15 and $12,000 on September 20. How much loss may J. D. deduct in 2019?

• A) $0.
• B) $5,000.
• C) $17,000.
• D) $20,000.
• E) None of the choices are correct.

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Definitions:

Documented

Something that is supported or proven by the presence of written information or records.

Honeymoon Phase

An initial period of enthusiasm or optimism in a new project, relationship, or situation.

Community

A group of people living in the same place or having a particular characteristic in common, or a feeling of fellowship with others sharing common attitudes, interests, and goals.

Disaster

A sudden event, such as an accident or a natural catastrophe, that causes great damage or loss of life.