37. Jones Corporation has a $50,000 loss [(revenue expenses - $50,000 100,000 = ($50,000)] in 2018. In 2019 Jones has net income of $40,000. How much of the 2018

NOL can Jones offset to income in 2019?

1. $0.
2. $20,000.
3. $32,000.
4. $40,000.

38. Identify which of the following statements is true.

A) Any amount of net business interest disallowed due to limitation may be carried over indefinitely.

B) If a corporation accrues an obligation to pay compensation, the corporation must make the payment by year-end to be able to deduct during the current year.

C) Corporations can deduct up to $10,000 in capital losses per year.

D) Net business interest is limited to 50% of adjusted taxable income.

39. Andy owns 20% of North Corporation and 60% of Tent Corporation. North and Tent have only one class of stock outstanding. Barbara owns 50% of North Corporation and 20% of Tent Corporation. North and Tent Corporations will be brother-sister corporations if

A) no stock ownership change occurs.

B) Barbara acquires an additional 10% of North stock.

C) Andy acquires an additional 10% of North stock and Barbara acquires an additional 10% of Tent stock.

D) Barbara acquires an additional 10% of North stock and an additional 10% of Tent stock.