28. LO.7 Alexis, Brayden, Brooke, and Charles are equal shareholders in Azul Corporation

(a calendar year S corporation). During the year, Azul has a short-term capital loss, qualified dividend income, charitable contributions, and qualified production activities income (with related W–2 wages). Regarding these transactions, explain the following results:

a. The short-term capital loss results in no additional tax benefit to Alexis.

b. Brayden pays no tax on the qualified dividends.

c. Brooke cannot claim a deduction for the charitable contributions.

d. Charles cannot claim all of the domestic production activities deduction.