J owns a 50% interest in an S corporation. This year the S corporation produced a loss of $100,000. In determining the amount of loss that J may deduct, which of the following statements is true?

Group of answer choices:

The passive loss limitations are applied before the at-risk limitations

The at-risk limitations are applied before the passive loss limitations

Neither the passive loss limitations nor the at-risk limitations apply in determining the amount of loss that is deductible.

None of the above is correct.