Boston Company, an electing S corporation, has an operating loss of $400,000 for the current year. Hank owns a 40% interest in the company and is a material participant. At the beginning of the year, Hank's adjusted basis in the stock is $30,000. During the year the company borrows $100,000 with a recourse note. How much of the loss can Hank deduct on his current-year income tax return?()A.$0B.$30,000C.$70,000D.$160,000E.$200,000

Boston Company, an electing S corporation, has an operating loss of $400,000 for the current year. Hank owns a 40% interest in the company and is a material participant. At the beginning of the year, Hank's adjusted basis in the stock is $30,000. During the year the company borrows $100,000 with a recourse note. How much of the loss can Hank deduct on his current-year income tax return?()

A.$0

B.$30,000

C.$70,000

D.$160,000

E.$200,000


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