Matt has three passive activities and has at-risk amounts in excess of $100,000 for each.During the year, the activities produced the following income (losses). $\begin{array}{ll}
\text { Activity A } && (\$ 60,000) \
\text { Activity B } && (40,000) \
\text { Activity C } & &75,000 \
\text { Net passive activity loss } &\underline{\quad\quad}& (\$ 25,000)
\end{array}$ Matt's suspended losses are as follows:
A)$25,000 is allocated to C? $0 to A and B.
B)$12,500 is allocated to A? $12,500 to B.
C)$15,000 is allocated to A? $10,000 to B.
D)$8,333 is allocated to A, B, and C.
E)None of these.

Question

Quizplus · Accepted Answer

The net passive activity loss of $25,000 is allocated proportionally to the losses of Activities A and B. Activity A's loss is $60,000 and Activity B's loss is $40,000, so the allocation is $15,000 to A and $10,000 to B.

Matt Has Three Passive Activities and Has At-Risk Amounts in Excess