In 2012, Arnold Invests $80,000 for a 20% Interest in a Partnership

In 2012, Arnold invests $80,000 for a 20% interest in a partnership in which he is a material participant.The partnership incurs a loss with $100,000 being Arnold's share.Which of the following statements is incorrect?

A) Since Arnold has only $80,000 of capital at risk, he cannot deduct any more than this amount against his other income.
B) Arnold's nondeductible loss of $20,000 can be carried over and used in future years (subject to the at-risk provisions) .
C) If Arnold has taxable income of $40,000 from the partnership in 2013 and there are no other transactions that affect his at-risk amount, he can use all of the $20,000 loss carried over from 2012.
D) Arnold's $100,000 loss is nondeductible in 2012 and 2013 under the passive loss provisions.
E) All of the statements are correct.