Farell is a member of Sierra Vista LLC. Although Sierra Vista is involved in a number of different business ventures, it is not currently involved in real estate either as an investor or as a developer. On January 1, year 1, Farell has a $152,000 tax basis in his LLC interest that includes his $135,000 share of Sierra Vista's general liabilities. By the end of the year, Farell's share of Sierra Vista's general liabilities have increased to $152,000. Because of the time he spends in other endeavors, Farell does not materially participate in Sierra Vista. His share of the Sierra Vista losses for year 1 is $189,000. As a partner in the Riverwoods Partnership, he also has year 1, Schedule K-1 passive income of $14,000. Farell is single and has no other sources of business income or loss.

Assuming the original facts and that Farell is deemed to be an active participant in Sierra Vista, and he also has a $277,000 loss from a sole proprietorship, determine how much total trade or business loss Farell will deduct on his return in year 1.

Loss Deductible