Pablo Owns 30% of Cancun Company, an Electing S Corporation

Multiple Choice

Pablo owns 30% of Cancun Company, an electing S corporation. Pablo's adjusted basis in the stock is $44,000 at the beginning of the current year. During the current year, Cancun distributes a $60,000 dividend. Cancun Company reports a $200,000 operating loss for the current year. If Pablo is not a material participant in Cancun Company, how much of the loss can he deduct on his income tax return?

A) $-0-
B) $18,000
C) $26,000
D) $44,000
E) $60,000