Stephanie Owns a 25% Interest in a Qualifying S Corporation

question 85

Multiple Choice

Stephanie owns a 25% interest in a qualifying S corporation. Stephanie's basis in the stock was $40,000 at the beginning of the year. Stephanie made no capital contributions and received no distributions during the year. Stephanie loaned the S corporation $10,000 this year. The S corporation incurred a $240,000 ordinary loss this year. Stephanie's deduction and carryover of the unused loss are

• A)$30,000 and $30,000.
• B)$40,000 and $20,000.
• C)$50,000 and $10,000.
• D)$60,000 and $0.

---

Definitions:

Materials Price Variance

The difference between the actual cost of direct materials and the expected (standard) cost multiplied by the actual quantity purchased or used.

Labour Rate Variance

The difference between the actual cost of labor and the expected (or standard) cost.

Flexible Budget

A budget that adjusts or flexes with changes in the volume or activity level of a business.