Orange, Inc $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $ (120,000 )
Liabilities:
Note Payable, City Bank

Orange, Inc. is a calendar year partnership with the following current year information:
Operating loss $\quad$$\quad$$\quad$$\quad$$\quad$ $ (120,000 )
Liabilities:
Note payable, City Bank $\quad$$\quad$ 20,000
Note payable, Jack Crow $\quad$$\quad$ 20,000
On January 1, John James bought 50% general interest in Orange, Inc. for $30,000. How much of the operating loss may John deduct on his Form 1040? Assume the excess business loss limitation does not apply.

A) $60,000
B) $30,000
C) $40,000
D) $50,000