The following information has been provided by a client for income tax purposes:

  • $45,000 salary from an S Corporation where the client is a vice-president
  • $3,500 loss from the S Corporation
  • $1,500 loss from a 3% interest in a limited partnership
  • $1,200 loss from a 10% interest in Middletown Partnership in which the client does not materially participate
  • $1,000 income from dividends

What amount of carryover of losses will the client have?

  1. $1,700
  2. $2,700
  3. $4,200
  4. $6,200