Alcott invested $20,000 for a 25% interest in a partnership (not a passive activity) on January 1, 2021. The partnership borrowed $100,000 (with full recourse to the partners) on January 15, 2021, to cover short-term cash flow requirements. During the year, the partnership generated a$60,000 loss. By December 31, 2021, the partnership had paid off $20,000 of the loan. What is Alcott’s at-risk amount on January 1, 2022?

a. $20,000.

b. $25,000.

c. $40,000.

d. $45,000.