Andy is a partner in ABCD partnership. He materially participates, and he has a basis in his partnership of $70,000, none of which comes from nonrecourse debt. In the current year, he is allocated $50,000 in operating (ordinary) losses as well as $50,000 in long-term capital loss. How much of the loss is he allowed to deduct, and what is the nature of the deductible losses?

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