Stephanie Owns a 25% Interest in a Qualifying S Corporation

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) $$\begin{array} { | l | l | } \hline & \text { Carryover } \\\text { Deductible Loss } & \text { Loss } \\\hline \$ 30,000 & \$ 30,000 \\\hline\end{array}$$
B) $$\begin{array} { | l | l | } \hline & \text { Carryover } \\ \text { Deductible Loss } & \text { Loss } \\\hline \$ 40,000 & \$ 20,000 \\\hline\end{array}$$
C) $$\begin{array} { | l | l | } \hline & \text { Carryover } \\ \text { Deductible Loss } & \text { Loss } \\\hline \$ 50,000 & \$ 10,000 \\\hline\end{array}$$
D) $$\begin{array} { | l | l | } \hline & \text { Carryover } \\ \text { Deductible Loss } & \text { Loss } \\\hline \$ 60,000 & \$ 0 \\\hline\end{array}$$