A number of years ago, Kay acquired an interest in a partnership in which she is not a material participant. Kay’s basis in her partnership interest at the beginning of 2013 is $40,000. Kay’s share of the partnership loss is $35,000 in 2013, while her share of the partnership income is $15,000 in 2014. How much may Kay deduct in 2013 and 2014, assuming she owns no other passive activities?
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