LO7 Mason owns a passive activity that generates a loss of $14,000 in 2009, $12,000 in 2010, and income of $4,000 in 2011. In 2010, Mason purchases a second passive activity that has passive income of $6,000 in 2010 and $10,000 in 2011. Discuss the effect of Mason’s passive activity investments on his taxable income in 2009, 2010, and 2011. Assume that neither passive activity involves rental real estate.