Use the Fact Situation in Q8 to Answer the Related

question 24

Multiple Choice

Use the fact situation in Q8 to answer the related question that follows. Also in this case,as between B and the bank,

• A)neither B's security interest nor the bank's have priority over the other.
• B)the bank has no security.
• C)the bank's security interest has priority over B's.
• D)B's security interest has priority over the bank's security interest.
• E)none of the above

---

Definitions:

Form 6198

An IRS form used by taxpayers to determine the amount of loss from an at-risk activity that is deductible.

IRC

The Internal Revenue Code, which is the comprehensive set of tax laws in the United States governing federal tax obligations.

Active Income/Loss

Income or losses generated from direct business activities or employment, as opposed to passive income from investments.

Passive Income/Loss

Earnings from rental property, limited partnerships, or other enterprises in which the individual is not actively involved.