Maria, an individual taxpayer, invests $100,000 in each of two non-leasing business activities, $80,000 of which has been borrowed for each activity from a bank on a nonrecourse basis. During 2020, she has allowable deductions (determined without regard to the at-risk limitation) of $50,000 from Activity 1 and $10,000 from Activity 2. Income from each of the activities was $20,000 in 2020. After applying the at-risk limitations, how should she report the results from each activity for tax purposes in 2022?

a. her deductible loss from Activity 1 is ($20,000) and she reports income of $10,000 from Activity 2.

b. her deductible loss from Activity 1 is ($20,000). The disallowed loss from Activity 1 offsets the income of $10,000 from Activity 2 so she reports income of $0 from Activity 2.

c. Her deductible loss from Activity 1 is ($30,000) and she reports income of $10,000 from Activity 2.

d. Her deductible loss from Activity 1 is $0 and she reports income of $10,000 from Activity 2.

e. Her deductible loss from Activity 1 is $0 and she reports income of $0 from Activity 2