Kenneth Owns All of the Stock of Kearney Corporation

Multiple Choice

Kenneth owns all of the stock of Kearney Corporation.Kenneth is also the President of Kearney and works full-time running the corporation.During the current year,Kearney has a loss of $40,000 from its operations.
I.If Kearney is an S Corporation,the corporation may carryback the loss 2 years (and obtain a refund of taxes paid) with any remaining loss carried forward 20 years.
II.If Kearney is a regular corporation,Kenneth may deduct the loss for AGI on his personal tax return because the corporation is a flow through entity.
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A) Only statement I is correct.
B) Only statement II is correct.
C) Both statements are correct.
D) Neither statement is correct.