Emily Is a 20% Shareholder in an S Corporation

Multiple Choice

Emily is a 20% shareholder in an S corporation.Emily acquired her interest on January 1 of the current year by investing $10,000 for 20% of the corporation's stock.In March, the corporation took out a bank loan for $100,000.The corporation reported a net loss for the current year of $200,000.How much of this loss can Emily deduct on her current year's tax return?

A) $40,000
B) $30,000
C) $20,000
D) $10,000