Raj owned one passive activity. Raj sold the activity and realized a $3,000 gain on the sale. Prior to the sale, he realized a current year loss from the activity of $5,000. In addition, he has suspended losses from prior years of $7,500. What is the net impact on Raj's AGI this year due to the passive activity?

A) increase of $3,000

B) no net change

C) decrease of $9,500

D) decrease of $12,500