Cory owns an apartment building and incurred a $35,000 rental loss. Janelle has no other passive activities and is not a real estate professional. She actively participates in renting the building. Her income is:

Form W-2 wages $30,000

Schedule C proprietorship 90,000

Schedule E rental loss ( 35,000)

IRA deduction 2,000

**What amount of rental loss is allowed?**

**Explain the rule on rental loss and provide the calculation and answer of your decision.**