Facts: Tony Taxpayer is an executive employee of a publicly traded corporation that is engaged in technology research and product development. He earns $1MM per year as the chief innovation officer. Except as noted below, he has no other job or trade or business. On 3/15/20x0 Tony sold stock he had held for many years at a loss of $30,000. Except for the hotel described below, the stock was the only property Tony had ever owned. On 1/1/20X0 Tony acquired the second property he had ever owned. He acquired a residential hotel located in San Francisco from his sister Sarah for a fair market value purchase price totaling $5MM using $25,000 cash as a down payment and an interest-only seller loan totaling $4.975MM secured by the property. The loan is nonrecourse and bears interest at the applicable federal rate. Tony also set up a hotel payroll and operating checking account and contributed $25,000 to the account. Tony spent approximately 200 hours during 20X0 working on hotel matters. Because Tony had no experience in the hotel business, his time was primarily oriented to reviewing monthly hotel revenue and expense statements and overseeing the activities of a "hotel manager" he had hired. As far as the hotel is concerned the average hotel patron's stay at the hotel was 45 days during 200 and no services were provided to guests other than daily maid service and front desk concierge assistance. On 12/31/20X0, the hotel had the following items of income and expense for 20X0: With due consideration of ALL of the facts involving the two property transactions, discuss the application, if at all, of the at-risk rules, the passive activity loss rules and capital loss limits. Consider in your answer specific loss limits, classification of the activity, and amount of loss carry-forwards. Show your calculations clearly. Points will be awarded based on the standards provided in the course Grading Rubric