Michelle is an active participant in the rental condominium property she owns. During the year, the property generates a ($17,000) loss; however, Michelle has sufficient tax basis and at-risk amounts to absorb the loss. If Michelle has $119,000 of salary, $10,400 of long-term capital gains, $3,400 of dividends, and no additional sources of income or deductions, how much loss can Michelle deduct?

$0; losses from rental property are passive losses and can only be offset by passive income.

$8,400

$8,600

$17,000

None of the choices are correct.