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Johnson is the sole shareholder of a management consulting corporation. In addition, he has invested in passive rental activities that generate $20,000 per year in

Johnson is the sole shareholder of a management consulting corporation. In addition, he has invested in passive rental activities that generate $20,000 per year in passive losses. According to the code, such losses from a passive activity cannot be applied as deductions to offset other types of taxable income. Advise Johnson as to how he can salvage the $20,000 deduction.

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