Wren Corporation (a C corporation that is the majority shareholder in Lark Corporation) has made loans to Lark Corporation which it forgave and wrote off this year, even though Lark Corporation was fully capable of repaying the loans.

a. Wren Corporation is not permitted a bad debt deduction for the loans. b. The loans result in a nonbusiness bad debt deduction to Wren Corporation. c. The loans provide Wren Corporation with a business bad debt deduction. d. Wren may claim a capital loss for worthless securities. e. Wren Corporation may claim a loss only if it is an accrual-basis taxpayer.