Wes's at-risk amount in a passive activity is $25,000 at the beginning of the current year. His current loss from the activity is $35,000 and he has no passive activity income. At the end of the current year, which of the following statements is incorrect?
a. Wes has a loss of $25,000 suspended under the passive loss rules.
b. Wes has an at-risk amount in the activity of $0.
c. Wes has a loss of $10,000 suspended under the at-risk rules.
d. Wes has a loss of $35,000 suspended under the passive loss rules.
e. None of the above is incorrect.

Option A is correct one.

Wes has a loss of $25,000 suspended under the passive loss rules.

Explanation:

Wes has no passive income. The measure of inactive misfortunes restricted by in danger impediment rules (which would be $25,000) must be set-off just against the easy revenue. As Wes has not earned any easy revenue during the year, the whole measure of $25,000 (as restricted by in danger confinement rules) will get suspended under the latent misfortune rules. Before applying latent movement rules, it is important to apply in risk limitation rules.

hi there, i would say your answer is:

b. there is a fixed quantity of resources and technology available.

hope that : )