LO.6 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 $ 10,000 B (5,000)

C (25,000)

D (20,000)

In the current year, she sold her interest in Activity D for a $19,000 gain. Activity D, which had been profitable until last year, had a current loss of $1,000. How will the sale of Activity D affect Sarah’s taxable income in the current year?