A taxpayer owns three rental real estate properties. Properties A and B generate losses; Property C generates income. The taxpayer is considering making an election to treat all three as a single activity. What is the primary advantage of this grouping election for purposes of the disposition of a passive activity?

It allows the taxpayer to deduct suspended losses from Property A if they sell only Property A.

It converts the rental income to active income.

It is generally NOT advantageous for disposition purposes because the suspended losses are not released until the entire grouped activity is disposed of.

It allows the taxpayer to use the $25,000 rental real estate allowance even if their AGI exceeds the phase-out.