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At-Risk Limitation Calculator (Section 465, Form 6198)

What do these figures come to once the work is shown?

Amount at risk from cash, property, recourse and qualified nonrecourse debt, the loss allowed and the loss carried to next year.

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Your figures
Example figuresIllustrative only. Type over them with your own.
Loss allowed under the at-risk rules
$42,000
Passes on to the passive activity rules next
Amount at risk before this year's loss
$42,000
Loss carried to next year
$8,000
Treated as a deduction from the same activity next year
Drawn to one scale
Loss allowed under the at-risk rules$42,000
Amount at risk before this year's loss$42,000
Loss carried to next year$8,000
At-risk amount after the loss$0
Recapture into income$0
All results
MeasureResult
Loss allowed under the at-risk rules$42,000
Amount at risk before this year's loss$42,000
Loss carried to next year
Treated as a deduction from the same activity next year
$8,000
At-risk amount after the loss$0
Recapture into income$0
How this was worked out
Work shownrecomputed as you type
At risk = cash + adjusted basis of property + recourse debt + qualified nonrecourse financing + income - prior allowed losses - distributions
Loss allowed = lesser of loss or amount at risk (not below zero)
Disallowed loss carries to next year for the same activity
If the at-risk amount falls below zero, prior losses are recaptured into income to that extent

Illustrative arithmetic on the figures you enter. Check the result against your firm's methodology before relying on it.

The formulas

  • At risk = cash + adjusted basis of property + recourse debt + qualified nonrecourse financing + income - prior allowed losses - distributions
  • Loss allowed = lesser of loss or amount at risk (not below zero)
  • Disallowed loss carries to next year for the same activity
  • If the at-risk amount falls below zero, prior losses are recaptured into income to that extent

How it works

Publication 925 lists what counts as at risk: money and the adjusted basis of property you contribute, amounts borrowed for the activity that you are personally liable to repay or that are secured by property not used in the activity, and qualified nonrecourse financing secured by real property used in holding real property. Nonrecourse loans, stop-loss arrangements and loans from a person with an interest in the activity are not at risk.

The at-risk rules apply before the passive activity rules. A loss that clears the at-risk limit still faces the passive loss limit. Form 6198 shows the computation. This tool works with cumulative totals so a single run gives the current-year limit.

Illustrative figures only. Check the result against your firm's methodology before relying on it.

Common questions

Does a nonrecourse equipment loan count?

No. Only qualified nonrecourse financing secured by real property in a real property activity counts.

What happens to the disallowed loss?

It is treated as a deduction from the same activity in the next tax year, and is allowed when the at-risk amount rises.

Can the at-risk amount go negative?

Distributions or a change from recourse to nonrecourse debt can push it below zero. The negative amount is recaptured into income, limited to losses allowed in earlier years.

Sources

Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.

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