[ 1 ] On December 31, Year 1, Mr. Wise purchased 50% of Cobras only class of stock outstanding for $300,000. Cobra is an electing S corporation. On November 30, Year 2, he purchased the other 50% of Cobras stock for $300,000. For the year, Cobra incurred an ordinary loss of $474,500. How much of the loss can Mr. Wise deduct on his individual income tax return for the year?

A.		$237,250
B.	$257,400

C.	$300,000
D.	$474,500

[ 2 ] A taxpayer owns 50% of the stock of an S corporation and materially participated in the corporations activities. At the beginning of the year, the taxpayer had an adjusted basis in the stock of $25,000 and made a loan to the corporation of $13,000. During the year, $3,000 of the loan was repaid, and the taxpayers share of the corporations loss for the year was $40,000. What is the amount of the loss that may be deducted on the taxpayers tax return?

A.		$25,000
B.	$35,000

C.		$38,000
D.	$40,000