Sue Invested $5,000 in the ABC Limited Partnership and Received

Sue invested $5,000 in the ABC Limited Partnership and received a 10 percent interest in the partnership.The partnership had $20,000 of debt she is not responsible to repay because she is a limited partner.Sue is allocated a 10 percent share of the debt, resulting in a tax basis of $7,000 and an at-risk amount of $5,000.During the year, ABC LP generated a ($70,000) loss.How much of Sue's loss is disallowed due to her tax basis or at-risk amount?

A) Zero; all of her loss is allowed to be deducted.
B) $2,000 disallowed because of her at-risk amount.
C) $2,000 disallowed because of her tax basis.
D) $4,000 disallowed because of her tax basis.
E) $4,000 disallowed because of her at-risk amount.