If an S Corporation generates a loss on its December 31, 2018 tax return, how is the loss handled? 1. it can be passed through to its shareholders 2. it can be carried forward indefinitely 3. it can be carried back five years, carried forward two years 4. it can be carried back two years, carried forward twenty years 5. it can be carried back two years, carried forward five years A reconciliation of the corporation's beginning and ending balance in its unappropriated retained earnings account is reported on Schedule 1.M-3 2.L 3. M-1 4. M-2