Passive Loss Limitation: Kate, Chad and Stan are partners in the KCS Partnership, which operates a manufacturing business. The partners formed the partnership ten years ago with Kate and Chade each as a general partner having a 40% capital and profits interest. Kate materially participates; Chad does not. Stan has 20% interest as a limited partner. At the end of the current year, the following information was available:

	Kate	Chad	Stan
Basis in partnership(before gains and losses)	100,000	100,000	50,000
Nonrecourse liability (already included in basis and not qualified real estate financing)	50,000	50,000	25,000
Operating Loss	(80,000)	(80,000)	(40,000)
Capital Gain	20,000	20,000	10,000

A) How much operating loss can each partner deduct in the current year?

B) Assuming each partner's individual AGI is less than 100,000, how much loss could each partner deduct if the KCS Partnersip were engaged in rental activities? Assume Kate and Chad both actively particpate but Stan does not.