In 2012, Pearl Invests $80,000 for a 10% Partnership Interest

In 2012, Pearl invests $80,000 for a 10% partnership interest in an activity in which she is a material participant.The partnership reports losses of $500,000 in 2012 and $450,000 in 2013.Pearl's share of the partnership's losses is $50,000 in 2012 and $45,000 in 2013.How much of the losses can Pearl deduct?

A) $50,000 in 2012 and $30,000 in 2013.
B) $50,000 in 2012 and $45,000 in 2013.
C) $0 in 2012 and $0 in 2013.
D) $50,000 in 2012 and $0 in 2013.
E) None of the above.

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