Ian Contributes $9,000 in Exchange for a 30 Percent Interest

Multiple Choice

Ian contributes $9,000 in exchange for a 30 percent interest in a C corporation.For 2014,the corporation reported a total loss of $35,000 and made no cash distributions.For 2015,the corporation reported net income of $45,000 and made a cash distribution to the shareholders.Ian received $5,000 of this cash distribution in 2015.Ian is in the 28% marginal tax bracket in both 2014 and 2015.How much income tax did Ian save for 2014 as a result of his share of loss from this corporation and how much income tax does Ian pay as a result of his ownership in the corporation for 2015?

A) zero tax savings in 2014 and $750 tax in 2015
B) zero tax savings in 2014 and $3,360 tax in 2015
C) $2,520 tax savings in 2014 and $3,360 tax in 2015
D) $2,520 tax savings in 2014 and $2,550 tax in 2015
E) $2,940 tax savings in 2014 and $3,780 tax in 2015