Cactus Company Is a Calendar Year S Corporation with the Following

question 73

Multiple Choice

Cactus Company is a calendar year S corporation with the following current year information: $$\begin{array} { l r } \text { Operating loss } & \$ ( 120,000 ) \\\text { Liabilities: } & \\\quad \text { Notes payable, City Bank } & 20,000 \\\text { Notes payable, Jake Crow } & 20,000\end{array}$$ On January 1, John James bought 50% of Cactus Company stock for $30,000. How much of the operating loss may John deduct on his Form 1040?

• A) $60,000
• B) $30,000
• C) $40,000
• D) $50,000

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Definitions:

Diet Care

Practices or guidelines focused on nutrition and food intake to maintain or improve health, often tailored to individual dietary needs or goals.

Obesity

A medical condition characterized by the excessive accumulation and storage of fat in the body, leading to health complications.

R&D

Research and Development, which involves investigative activities that a business or person undertakes to innovate and introduce new products or services or to improve their existing offerings.

Government Proposals

Formal plans or suggestions presented to public authorities aiming to address community needs, implement policies, or secure contracts.