A Calendar Year C Corporation Has a $41,000 NOL in 2010

question 140

Multiple Choice

A calendar year C corporation has a $41,000 NOL in 2010, but it elects S status for 2011 and generates an NOL of $30,000 in 2011. At all times during 2011, the stock of the corporation was owned by the same 10 shareholders, each of whom owned 10% of the stock. Kris, one of the 10 shareholders, has an S stock basis of $2,300 at the beginning of 2011. How much of the loss, if any, is deductible by Kris in 2011?

• A) None.
• B) $2,300.
• C) $3,000.
• D) $7,100.

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Definitions:

Capacity Analysis

Identifying the necessary manufacturing capacity a business must have to respond to varying product demands.

Time-Driven Activity-Based Costing

A costing methodology that assigns costs to products or services based on the actual time spent on each activity, allowing for more accurate and dynamic cost assessments.

Customer Service Department

This department is responsible for providing assistance and advice to the customers of a company, handling inquiries, complaints, and support requests.

Capacity Analysis

The procedure of figuring out what level of manufacturing capacity is needed by a company to adjust to its products' changing needs.