Walter, a single taxpayer, purchased a limited partnership interest in a tax shelter in 1993. He also acquired a rental house in 2020, which he actively manages. During 2020, Walter's share of the partnership's losses was $17,500, and his rental house generated $27,500 in losses. Walter's modified adjusted gross income before passive losses is $135,000.

a. Calculate the amount of Walter's allowable loss for rental house activities for 2020.