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Sue invested $6,600 in the ABC Limited Partnership and received a 10 percent interest in the...

Sue invested $6,600 in the ABC Limited Partnership and received a 10 percent interest in the partnership. The partnership had $23,200 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 $8,920 and an at-risk amount of $6,600. During the year, ABC LP generated a ($73,200) 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. $2,320 disallowed because of her at-risk amount.

  • C. $2,320 disallowed because of her tax basis.

  • D. $4,640 disallowed because of her tax basis.

  • E. $4,640 disallowed because of her at-risk amount.

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