Form 6198 PDF Details

Navigating the myriad facets of the tax code is a challenging endeavor for individuals and businesses alike, notably when dealing with the specifics of investment activities and their related losses. Form 6198, titled "At-Risk Limitations," serves a pivotal role in this arena, designed to guide taxpayers in calculating the allowable losses from "at-risk" activities for a given tax year. Issued by the Internal Revenue Service (IRS), this form integrates with a taxpayer's annual return, applying a framework to evaluate the extent of loss that can be deducted based on the amount the taxpayer has economically vested or is "at risk" in a particular activity. The form bifurcates the process into sections: identifying the current year's profit or loss from an activity, a simplified computation of the amount "at risk," and a detailed computation for those who need to delineate further their investment at the start of the tax year. Additionally, it intersects with other regulatory guides and tax forms like Schedule D, Form 4797, and Forms 1065, 1065-B, or 1120S for varied reporting requirements. This integration is crucial, highlighting the necessity for meticulous attention to detail in reporting and calculating income and losses. Moreover, for losses that align with passive activity rules, taxpayers are directed towards further instructions under FORMS 8582 or 8810, underscoring the layered complexity and the IRS's effort to streamline tax compliance within specified regulatory boundaries.

QuestionAnswer
Form NameForm 6198
Form Length1 pages
Fillable?Yes
Fillable fields1
Avg. time to fill out27 sec
Other names2009, 10a, example of completed form 6198, 19b

Form Preview Example

Form 6198

AT-RISK LIMITATIONS

 

OMB No. 1545-0712

 

 

 

(Rev. November 2009)

▶ Attach to your tax return.

 

 

 

Attachment

Department of the Treasury

 

 

▶ See separate instructions.

 

Sequence No. 31

Internal Revenue Service

 

Name(s) shown on return

 

Identifying number

 

 

 

 

Description of activity (see page 2 of the instructions)

Part I Current Year Profit (Loss) From the Activity, Including Prior Year Nondeductible Amounts.

See page 2 of the instructions.

1 Ordinary income (loss) from the activity (see page 2 of the instructions)

1

2Gain (loss) from the sale or other disposition of assets used in the activity (or of your interest in

 

the activity) that you are reporting on:

 

a

Schedule D

2a

b

Form 4797

2b

c

Other form or schedule

2c

3Other income and gains from the activity, from Schedule K-1 of Form 1065, Form 1065-B, or

Form 1120S, that were not included on lines 1 through 2c

3

4Other deductions and losses from the activity, including investment interest expense allowed

from Form 4952, that were not included on lines 1 through 2c

4 (

5Current year profit (loss) from the activity. Combine lines 1 through 4. See page 3 of the

instructions before completing the rest of this form

5

)

Part II Simplified Computation of Amount At Risk. See page 3 of the instructions before completing this part.

6Adjusted basis (as defined in section 1011) in the activity (or in your interest in the activity) on the

 

first day of the tax year. Do not enter less than zero

7

Increases for the tax year (see page 3 of the instructions)

8

Add lines 6 and 7

9Decreases for the tax year (see page 4 of the instructions) . . . . . . . . . . . . .

10a Subtract line 9 from line 8 . . . . . . . . . . . . ▶

10a

 

 

bIf line 10a is more than zero, enter that amount here and go to line 20 (or complete Part III).

Otherwise, enter -0- and see Pub. 925 for information on the recapture rules . . . . . .

6

7

8

9

10b

Part III Detailed Computation of Amount At Risk. If you completed Part III of Form 6198 for the prior year, see page 4 of the instructions.

11Investment in the activity (or in your interest in the activity) at the effective date. Do not enter

 

less than zero

12

Increases at effective date

13

Add lines 11 and 12

14

Decreases at effective date

15Amount at risk (check box that applies):

a At effective date. Subtract line 14 from line 13. Do not enter less than zero.

b From your prior year Form 6198, line 19b. Do not enter the amount from line 10b of your prior year form.

16Increases since (check box that applies):

a

Effective date

b

The end of your prior year

17

Add lines 15 and 16

18Decreases since (check box that applies):

a

Effective date

b

The end of your prior year

19a

Subtract line 18 from line 17 . . . . . . . . . . . ▶

19a

 

 

bIf line 19a is more than zero, enter that amount here and go to line 20. Otherwise, enter -0- and see Pub. 925 for information on the recapture rules . . . . . . . . . . . . . . .

11

12

13

14

15

16

17

18

19b

Part IV Deductible Loss

20

Amount at risk. Enter the larger of line 10b or line 19b

20

 

21

Deductible loss. Enter the smaller of the line 5 loss (treated as a positive number) or line 20.

 

 

 

See page 8 of the instructions to find out how to report any deductible loss and any carryover .

21

(

)

Note: If the loss is from a passive activity, see the Instructions for FORM 8582, Passive Activity Loss Limitations, or the Instructions for FORM 8810, Corporate Passive Activity Loss and Credit Limitations, to find out if the loss is allowed under the passive activity rules. If only part of the loss is subject to the passive activity loss rules, report only that part on Form 8582 or Form 8810, whichever applies.

For Paperwork Reduction Act Notice, see page 8 of the instructions.

Cat. No. 50012Y

Form 6198 (Rev. 11-2009)

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