C&C Properties is an S corporation that owns two rental real estate undertakings: Carrot Plaza and Cantaloupe Place. Both properties produce an annual $10,000 operating loss. C&C’s Schedule K aggregates the results of the two locations into one number.
Dan and Marta, C&C’s two equal shareholders, both hold a $7,000 stock basis in C&C as of the beginning of the year. Marta actively participates in the Cantaloupe location, but not at Carrot. Dan actively participates at neither location. Determine the amount of the available loss pass-throughs for both shareholders.