Jorge has investments in two limited partnerships, both of which constitute passive activities. This year, Jorge’s distributive share of income or loss from each partnership is as follows:

In addition to the current year income or loss, Jorge has a passive loss carryforward from prior years of ($10,000). How much of the passive loss carryforward can Jorge deduct on his current year tax return?
a. $10,000.
b. $3,000.
c. $0.
d. $7,000.

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Partnership 1 Partnership 2 ($22,000) $25,000