An Electing S Corporation Has a $30,000 Ordinary Loss for the Non-Leap

question 84

Multiple Choice

An electing S corporation has a $30,000 ordinary loss for the non-leap year. On January 1, Beverly and Sonya own equally all of the S corporation stock. On the 146th day of the year, Beverly gives her one-half of the S corporation stock to her daughter Becky. How much of the $30,000 ordinary loss is allocated to Sonya?

• A)$25,000
• B)$15,000
• C)$10,000
• D)$6,000

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Definitions:

Right To Contract

The legal ability of an individual or entity to enter into binding agreements.

Great Britain

The island comprising England, Scotland, and Wales, often used to refer to the United Kingdom which includes Northern Ireland.

Mental Illness

A broad range of medical conditions that affect a person's thinking, feeling, mood, and behavior.

Legal Capacity

This term refers to a person's ability to enter into binding contracts and have them enforced by law, typically governed by factors such as age and mental state.