A lead partner is a local accounting firm, whose practice consists of tax consulting and compliance, serves clients by providing prepare-up and payroll processing services. As his firm grows, he has developed various ways to build its business.

He and his wife have created DJ partnership to purchase an office building where he has moved his practice. Because the building is larger than what the practice currently needs, space is rented to other tax practictioners. In addition to providing office space, the partner ship offers professional and administrative services on an exclusive basis to the tenants. these services include secretarial support, telephone answering service, tax professionals available for special projects, access to a tax research library, computer hardware technology and miscellaneous administrative support. DJ partnership considers its primary activity to be providing professional and administrative services to its tenants rather than being a lessor.

Because of the attractiveness of the services offered to its tenants, the building is fully leased. In the first year, Judy works full-time at the partnership and he commits about 550 hours to its operations. For the first year, the partnership incurs a tax loss of $60,000. Without considering the impact of the loss, David and Judy's AGI is $175,000.

What is the deductibility to find the $60,000 loss for federal income tax purposes?