Sarah has investments in four passive activity partnerships purchased several years ago. Last year the income and losses were as follows:

In the current year, she sold her interest in Activity D for a $10,000 gain. Activity D, which had been profitable until last year, had a current loss of $1,500. Answer the following questions to determine how the sale of Activity D affects Sarah's taxable income in the current year.

a. The amount of suspended losses carried forward to the year of the sale is $__________.

b. What amount of the suspended losses is allocated to Activity D? $__________.

c. How much, if any, of this net gain may be used to absorb passive activity losses from other activities? $__________.

Activity Income (Loss) A $30,000 B (30,000) (15,000) D (5,000)