Five years ago, Gerald invested $150,000 in a passive activity, his sole investment venture. On January 1, 2013, his amount at risk in the activity was $30,000. His shares of the income and losses were as follows:

Year Income (Loss)

2013 ..........($40,000)

2014 .......... (30,000)

2015 .......... 50,000

Gerald holds no suspended at-risk or passive losses at the beginning of 2013. How much can Gerald deduct in 2013 and 2014? What is his taxable income from the activity in 2015? Consider the at-risk rules as well as the passive loss rules.