A Calendar Year C Corporation Reports a $41,000 NOL in 2011

question 134

Multiple Choice

A calendar year C corporation reports a $41,000 NOL in 2011, but it elects S status for 2012 and generates an NOL of $30,000 in that year. At all times during 2012, 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, holds an S stock basis of $2,300 at the beginning of 2012. How much of the 2012 loss, if any, is deductible by Kris?

• A)$0.
• B)$2,300.
• C)$3,000.
• D)$7,100.

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Definitions:

Subgroup

A smaller group formed within a larger group, often sharing common interests or characteristics distinct from the larger group.

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A term referring to a larger collection or ensemble of individuals or entities united by a common purpose or characteristic.

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