Mason owns a passive activity that generates a loss of $14,000 in 2010, $12,000 in 2011, and income of $4,000 in 2012. In 2011, Mason purchases a second passive activity that has passive income of $6,000 in 2011 and $10,000 in 2012. Discuss the effect of Mason's passive activity investments on his taxable income in 2010, 2011, and 2012. Assume that neither passive activity involves rental real estate.