A Calendar Year C Corporation Reports a $41,000 NOL in 2018

question 16

Multiple Choice

A calendar year C corporation reports a $41,000 NOL in 2018, but it elects S status for 2019 and generates an NOL of $30,000 in that year. At all times during 2019, 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 2019. How much of the 2019 loss, if any, is deductible by Kris?

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

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Definitions:

Employment Status

Refers to an individual's current work situation, which can be categorized into employed, unemployed, or out of the labor force.

Independence

Independence in statistics means that two events have no influence on each other, indicating that the occurrence of one event does not affect the probability of the other occurring.

Level of Significance

The threshold used in statistical testing to determine whether the observed data is sufficiently inconsistent with the null hypothesis, commonly reported as a p-value.

Blood Type

A classification of blood based on the presence or absence of inherited antigenic substances on the surface of red blood cells.