Sue Invested $8,000 in the ABC Limited Partnership and Received

Sue invested $8,000 in the ABC Limited Partnership and received a 10 percent interest in the partnership. The partnership had $26,000 of qualified nonrecourse debt and $26,000 of debt Sue is not responsible to repay because she is a limited partner. Sue is allocated a 10 percent share of both types of debt, resulting in a tax basis of $13,200 and an at-risk amount of $10,600. During the year, ABC LP generated a ($132,000) loss. How much of Sue's loss is disallowed due to her tax basis or at-risk amount?

A) $0; all of her loss is allowed to be deducted.
B) $2,600 disallowed because of her at-risk amount.
C) $2,600 disallowed because of her tax basis.
D) $5,200 disallowed because of her tax basis.
E) $5,200 disallowed because of her at-risk amount.