In November $2018,$ Sam bought a limited partnership stake in Quick $$n Good,$$a fast$-$casual dining restaurant. During the process of capitalizing the business, $$1,000,000$ was borrowed from Southside Bank; however, each of the partners was required to pledge personal assets as collateral to satisfy the bank loan in case the restaurant defaulted. To satisfy the requirement, Sam pledged shares of Amazon.com, Inc. $($Amazon$)$ worth $$300,000$ and with a basis of $$100,000.$

The restaurant was doing great until recently when rampant health code violations were discovered and publicized by the media. Consequently, business has declined so much that the restaurant$$s continued existence is in doubt. In addition, the $$1,000,000$ loan is now due for payment. With Quick $$n Good not being able to pay, the bank has called the collateral provided by the partners to satisfy the debt. As a result, Sam sold the Amazon stock for $$300,000$ and forwarded the proceeds to the bank. Sam contends that his share of Quick $$n Good$$s passive activity losses can offset the Amazon stock sale $$200,000$ gain $($i$.$e$.,$ when Quick $$n Good$$s passive activity losses are netted against the Amazon gain, none of the gain is subject to tax$).$ Is this correct?

$*$Limit your research to the Code, Regulations, and cases.$$ You can, of course, look at other material, like Revenue Rulings and secondary sources, etc., for guidance