$$In Year $2,$ P group has a $$50$ CNOL, determined by accounting for only S$$s items of income, gain, deduction, and loss.

$$S$$s loss is not absorbed by P group in Year $2,$ nor can it be used as an NOL carryback to Year $1.$

$$S$$s NOL is used in Year $3$ as an NOL carryforward.

In which year does P have a $$50$ negative basis adjustment to S stock?

Year $3$

Year $1$

Year $2$