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Sarah has investments in four passive activity partnerships purchased several years ago. Last year the income and losses were as follows: Activity Income (Loss) A

Sarah has investments in four passive activity partnerships purchased several years ago. Last year the income and losses were as follows:

Activity Income (Loss)

A $ 30,000

B (30,000)

C (15,000)

D (5,000)

In the current year, she sold her interest in Activity D for a $10,000 gain. Activity D, which had been profitable until last year, had a current loss of $1,500. How will the sale of Activity D affect Sarahs taxable income in the current year?

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