Joseph, age 54 and single, earns a salary of $190,000 working for a manufacturing company. He is an avid saver and over the years has amassed an investment portfolio of $2 million. He expects the portfolio to appreciate in value at an average rate of 8% per year. Last year, he received dividends and interest from the portfolio of $40,000. After speaking with a financial planner, Joseph decided to invest $50,000 of his portfolio to purchase a 15% interest in a passive activity. Operations of the activity have now resulted in a loss of $400,000, of which Joseph's share is $60,000. How is Joseph's loss for the current year characterized for income tax purposes?