1. In the current year, Joel has a passive activity loss of $15,000 from a limited partnership interest in XYZ, LP.He also has suspended losses from XYZ from prior years of $40,000.At the end of the current year, Joel sells his entire interest in XYZ at a $50,000 gain.What is the net effect of these items on his current year adjusted gross income?

$5,000 decrease

$50,000 increase

$35,000 increase

$10,000 increase

$0