Perry Owns All of the Stock of Sound Corporation

Multiple Choice

Perry owns all of the stock of Sound Corporation. Perry is also the President of Sound and works full-time running Sound. During the current year, Sound has a loss of $75,000 from its operations.
i.If Sound is an S Corporation, Perry deducts the loss on his personal tax return as a deduction from AGI.II.If Sound is a regular corporation, the corporation can carry the loss forward indefinitely to reduce taxable income in future years.
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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.