Problem:
In the current year, Alice reports $150,000 of salary income, $20,000 of income from Activity X, $35,000 loss from Activity Y, and $15,000 loss from Activity Z. All three activities are passive with respect to Alice and are purchased during the current year.
Required:
Question 1: What is the amount of loss that may be deducted with respect to each of these activities.
Question 2: Compute the amount of loss that must be carried over for each activity.
Note: Please show the work not just the answer.