Please prepare a memorandum for Ms. Rollison, a client, to explain how her investment activities affect her taxable income in 2011, and the anticipated effect in 2012.The facts are as follows: We are in the process of filing the 2011 federal income tax return and planning for the 2012 federal income tax returns for our client, Ruth Rollison. In 2011, Ruth had income of $100,000 from both portfolio and active income sources. The passive income was the result of her ownership interests in two passive activities. For passive activity one (PA1), Ruth had a net loss of $20,000 and for passive activity two (PA2) she had net income of $2,000.What is the effect of these passive activities on her 2011 income?Please provide a schedule within the memo that shows the activities and the amount included in her Adjusted Gross Income in 2011. In 2012, Ruth has purchased an interest in passive activity three (PA3).The results of her three passive activities in 2012 are expected to be the following: PA1 <$10,000> PA2 3,000 PA3 30,000 What will be the effect of the Ruth’s passive activities on her 2012 taxable income? Please provide a schedule that shows the activities and the amount that should be included in her 2012 Adjusted Gross Income from her passive investments. What if PA3 is expected to generate income of 10,000?What will the affect be on Ruth’s 2012 adjusted gross income