On January 1, X9, Gerald Received His 50% Profits and Capital

Multiple Choice

On January 1, X9, Gerald received his 50% profits and capital interest in High Air, LLC in exchange for $2,000 in cash and real property with a $3,000 tax basis secured by a $2,000 nonrecourse mortgage. High Air reported a $15,000 loss for its X9 calendar year. How much loss can Gerald deduct, and how much loss must he suspend if he only applies the tax basis loss limitation?

A) $0, $4,000
B) $0, $7,500
C) $0, $15,000
D) $4,000, $0
E) None of these