Maria, an engineer, has an adjusted gross income of $167,000 before considering the following losses. The passive activity rules disallow the deduction for the loss in which of the following?
I. Maria has a $21,000 loss from her ownership of Family Apartment Village, a low-income housing project.
II. Maria owns and actively participates in managing a rental house across the street from East State College. This activity generates a $7,000 loss in the current year.