Suppose Clampett, Incorporated, Terminated Its S Election on August 28

Multiple Choice

Suppose Clampett, Incorporated, terminated its S election on August 28, 2020. At the end of the S corporation's short tax year ending on August 28, J.D.'s stock basis and at-risk amounts were both zero (he has never had debt basis) , and he had a suspended loss of $20,000. In 2021, J.D. made additional capital contributions of $5,000 on March 15 and $12,000 on September 5. How much loss may J.D. deduct in 2021?

A) $0
B) $5,000
C) $17,000
D) $20,000
E) None of the choices are correct.