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Nora is an active participant in the rental condominium property she owns. During the year, the...

Nora is an active participant in the rental condominium property she owns. During the year, the property generates a ($30,000) loss; however, she has sufficient tax basis and at-risk amounts to absorb the loss. If Nora has $85,000 of salary, $10,000 of long-term capital gains, $3,000 of dividends, and no additional sources of income or deductions, how much loss can she deduct?

A.

Zero; losses from rental property are passive losses and can only be offset by passive income.
B.

$25,000.
C.

$11,000.
D.

$15,000.
E.

None of the choices are correct.
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