To calculate Hannah's net passive income or loss deduction, we need to consider her rental income and rental losses. She actively participates in managing both rentals, so she can potentially offset rental losses against rental income. Rental Income: $22,000 Rental Loss: -$32,000 Now, let's calculate the net rental income: Net Rental Income = Rental Income - Rental Loss Net Rental Income = $22,000 - $32,000 Net Rental Income = -$10,000 Since Hannah has a net rental loss of $10,000, we need to determine if she can deduct this loss against her other sources of income (salary and dividends). The deduction of rental losses against other income is subject to certain rules, primarily based on Hannah's