You have decided to dispose of a passive activity. The activity has generated a loss before the disposal date. What is the proper procedure to allocate/deduct the loss? 1) apply to gain on disposal, 2) apply to other passive income. 3) apply to active income 1) apply to other passive income, 2) apply to other active income, 3) apply to gain on disposal 1) apply to other active income. 2) apply to gain on disposal. 3) apply to other passive income Losses are lost and cannot be taken when activity is disposed 1) apply to other passive income, 2) apply to gain on disposal, 3) apply to other active income