Green Corporation Earns Active Income of $50,000 and Receives $40,000

Green Corporation earns active income of $50,000 and receives $40,000 in dividends during the year. In addition, Green incurs a loss of $70,000 from an investment in a passive activity acquired several years ago. Consider the following two statements:
(1) Green's current deduction for passive activity losses is $50,000 if it is a closely held C corporation that is not a personal service corporation.
(2) Green's current deduction for passive activity losses is $0 if it is a personal service corporation. Which of the following answers is correct?

A) Only statement 1.
B) Only statement 2.
C) Both statements 1 and 2.
D) Neither statement 1 or 2.
E) None of the above.