Sarah has investments in four passive activity partnerships purchased several years ago. Last year the income and losses were as follows:

Activity

Income (Loss)

A

$ 30,000

B

(30,000)

C

(15,000)

D

(5,000)

In the current year, she sold her interest in Activity D for a $10,000 gain. Activity D, which had been profitable until last year, had a current loss of $1,500. How will the sale of Activity D affect Sarah’s taxable income in the current year?