On January $1,$ year one, Maria borrows $$70,000$ from a commercial bank and uses the loan proceeds, together with $$30,000$ of her own funds, to purchase the food and souvenir concession at a local ballpark. The loan is nonrecourse. In year one the concession has a taxable loss of $$40,000.$ In year two the concession has taxable income from operations of $$25,000.$ Maria does not contribute or withdraw any funds from the operation in year one or year two. Maria materially participates in the activity during both years.

How much, if any, of the concession loss may Maria deduct in year one?

How much, if any, of the concession income must Maria report in year two?

Assume the same facts as in part $($a$),$ except that the $$70,000$ loan is recourse. How much, if any, of the year one loss may Maria deduct?