Sie sind auf Seite 1von 7

insurance and insurance against tort

Department of the Treasury liability); or


Internal Revenue Service 3. Amounts borrowed for use in the
activity from a person who has an
interest in the activity, other than as a
Instructions for Form 6198 creditor, or who is related under section
465(b)(3)(C) to a person (except you)
having such an interest. However, this
At-Risk Limitations does not apply to an interest as a
Section references are to the Internal Revenue Code unless otherwise noted. shareholder in the case of amounts
borrowed by a corporation from its
shareholders. (See Pub. 925 for
General Instructions are not subject to the at-r isk rules. See
sections 465(c)(4), (5), and (6).
definitions.); or
4. Any cash or property contributed to
Paperwork Reduction Act 4. Exploring for, or exploiting, oil and the activity, or to your interest in the
gas resources as a trade or business or activity, that is covered by:
Notice for the production of income. ● Nonrecourse indebtedness or
We ask for the information on this form 5. Exploring for, or exploiting, protected against loss by a guarantee,
to carry out the Internal Revenue laws of geothermal deposits as defined in stop-loss agreement, or other similar
the United States. You are required to section 613(e)(2). arrangement; or
give us the information. We need it to 6. Any other activity carried on as a ● Indebtedness from a person who has
ensure that you are complying with trade or business or for the production an interest in the activity, other than as a
these laws and to allow us to figure and of income that is not included in 1 creditor, or who is related under section
collect the right amount of tax. through 5 above. 465(b)(3)(C) to a person (except you)
The time needed to complete and file Exception. Holding real property placed having such an interest. However, this
this form will vary depending on in service before 1987 and the holding does not apply to an interest as a
individual circumstances. The estimated of an interest acquired before 1987 in a shareholder in the case of amounts
average time is: partnership, an S corporation, or other borrowed by a corporation from its
Recordkeeping 1 hr., 12 min. pass-through entity already engaged in shareholders. (See Pub. 925 for
Learning about the an activity of holding real property definitions.)
law or the form 59 min. before 1987 are not affected by the Subject to pending regulations, you
at-risk rules. This exception does not may not have to file this form if you are
Preparing the form 1 hr., 5 min. apply to holding mineral property. engaged in an activity included in 6
Copying, assembling, and Note: A special exception to the at-r isk under At-Risk Activities above and you
sending the form to the IRS 20 min. rules applies to a qualifying business of a only have borrowed amounts described
If you have comments concerning the qualified C corporation. See Pub. 925 for in 3 under Who Must File above. Also,
accuracy of these time estimates or more details. see Pub. 925 for transitional rules if you
suggestions for making this form have an activity listed in 1 through 5
simpler, we would be happy to hear from Who Must File under At-Risk Activities above.
you. You can write to both the IRS and Form 6198 is filed by individuals Qualified Nonrecourse Financing
the Office of Management and Budget (including Schedules C, E, and F (Form
at the addresses listed in the Qualified nonrecourse financing is
1040) filers), estates, trusts, and certain financing for which no one is personally
instructions for the tax return with which closely held C corporations described in
this form is filed. liable for repayment and is:
section 465(a)(1)(B), as modified by
section 465(a)(3). ● Borrowed by you in connection with
Purpose of Form File Form 6198 if during the tax year
holding real property,
Form 6198 is used to figure: you, a partnership in which you were a ● Secured by real property used in the
activity,
● The current year profit (loss) from an partner, or an S corporation in which you
at-risk activity for 1994 (Part I). were a shareholder had any of the ● Not convertible from a debt obligation
following amounts invested in an at-risk to an ownership interest, and
● The amount at risk for 1994 (Part II or
Part III). activity carried on as a trade or business ● Loaned or guaranteed by any Federal,
or for the production of income in which state, or local government, or borrowed
● The deductible loss for 1994 (Part IV). by you from a qualified person.
you incurred a loss. You are not
The at-risk rules of section 465 limit A qualified person is a person who
considered at risk for the following
the loss you can deduct to the amount actively and regularly engages in the
amounts:
of the loss or your amount at risk, business of lending money, such as a
whichever is less. 1. Nonrecourse loans used to finance
the activity, to acquire property used in bank or savings and loan association.
For more details, get Pub. 925, A qualified person is not:
the activity, or to acquire your interest in
Passive Activity and At-Risk Rules. ● A person related to you (although a
the activity (unless the nonrecourse loan
is secured by your own property that is person related to you may be a qualified
At-Risk Activities not used in the activity). However, you person if the nonrecourse financing is
Losses from the following activities are are considered at risk for qualified commercially reasonable and on the
affected by the at-risk limitation rules. nonrecourse financing secured by real same terms as loans involving unrelated
1. Holding, producing, or distributing property used in the holding of real persons),
motion picture films or video tapes. property (other than mineral property). ● The seller of the property (or a person
2. Farming as defined in section (See Qualified Nonrecourse Financing related to the seller), or
464(e)(1). below.); or ● A person who receives a fee due to
3. Leasing any section 1245 property 2. Cash, property, or borrowed your investment in the real property (or a
as defined in section 1245(a)(3). amounts used in the activity that are person related to that person).
Caution: Certain equipment leasing protected against loss by a guarantee,
activities by closely held C corporations stop-loss agreement, or other similar
arrangement (excluding casualty
Cat. No. 50013J
Aggregation or Separation of accounting methods to figure the Lines 2a, 2b, and 2c
amounts to enter.
Activities If you are a partner or an S
Gain (Loss)
The IRS has the authority to prescribe corporation shareholder, enter any items Combine long- and short-term capital
regulations to aggregate or separate for the activity that are from your gains and losses and ordinary gains and
activities for purposes of the at-risk investment in the activity or passed losses from the sale or other disposition
rules. At the time these instructions went through to you on Schedule K-1 or a of assets used in the activity or your
to print, regulations had not been issued similar statement. interest in the activity. Enter gains and
for tax years beginning after 1992. Description of activity.—After the losses without regard to the at-risk
Therefore, the rules that follow may description of the activity, enter the limitations, the limitation on capital
change. The IRS will publicize these name and identifying number of the losses, or the passive activity loss
changes when additional information is partnership or S corporation, if any. limitations. If more than one item is
available. included on a line, attach a statement
File one form if your activities are describing each item.
listed under the aggregation rules. File a
Part I Do not include amounts on lines 2a
separate form for each activity if your Current Year Profit (Loss) and 2b that are included on line 2c.
activities are listed under the separation Taxpayers Other Than Partners or S Enter the form number or schedule letter
rules. Corporation Shareholders.—If you to the left of the entry space for line 2c.
Aggregation Rules.—All section 1245 have a loss or a deduction from an For example, if you file Form 4684,
properties that are leased or held for earlier tax year that you could not Casualties and Thefts, and carry
lease and placed in service in any tax deduct because of the at-risk rules, be amounts from that form to Form 4797,
year of a partnership or an S corporation sure to include those amounts on the Sales of Business Property, either enter
are treated as one activity. Also, a appropriate form or schedule on your (a) the amounts attributable to the
partner in a partnership or an S current year tax return before starting activity from Form 4684 on line 2c and
corporation shareholder may aggregate Part I. For example, if in 1993, your write “From Form 4684” to the left of the
and treat as a single activity all of the Schedule C had a $1,500 loss on line entry space, or (b) the amount
properties of that partnership or S 31, but because of the at-risk rules your attributable to the activity carried from
corporation that are included within each loss was limited to $500, include the Form 4684 to Form 4797 on line 2b. If
of categories 1, 2, 4, and 5 under $1,000 on your 1994 Schedule C in Part you carry a loss from Form 4684 to
At-Risk Activities on page 1. V, Other Expenses and identify it as a Schedule A (Form 1040), show either the
Activities described in 6 under At-Risk prior year loss. loss from Schedule A, or the loss from
Activities on page 1 that constitute a Form 4684 on line 2c.
Partners and S Corporation
trade or business are treated as one Shareholders.—If you have a loss or a Taxpayers Other Than Partners or S
activity if (a) the taxpayer actively deduction from an earlier tax year that Corporation Shareholders.—Include on
participates in the management of that you could not deduct because of the your current year forms and schedules,
trade or business, or (b) the business is at-risk rules, these losses and such as Form 4797 and Schedule D,
carried on by a partnership or an S deductions should be included in the prior year losses that you could not
corporation and 65% or more of the current year amounts you enter in Part I, deduct because of the at-risk rules.
losses for the tax year are allocable to lines 1 through 4. For example, if in Partners and S Corporation
persons who actively participate in the 1993, your Schedule K-1 had a $1,500 Shareholders.—Include on lines 2a, 2b,
management of the trade or business. loss on line 1, but because of the at-risk and 2c your current year gains and
Similar rules apply to activities described rules your loss was limited to $500, losses and prior year losses attributable
in 1 through 5 under At-Risk Activities include both the $1,000 loss from 1993 to the activity that you could not deduct
on page 1. and the amount from your 1994 because of the at-risk rules.
Separation Rules.—Your activity in each Schedule K-1 on line 1 of Form 6198. Lines 3 and 4
film, video tape, section 1245 property
(that is leased or held for lease), farm, Line 1 Other Income, Gains, Deductions,
holding of real property, oil and gas Ordinary Income (Loss) (Losses)
property (as defined in section 614), or If you are a partner or S corporation
Taxpayers Other Than Partners or S
geothermal property (as defined in shareholder, include other income, gains,
Corporation Shareholders.—Enter your
section 614) that is not aggregated with losses, and other deductions from
ordinary income or loss from the at-risk
other activities under the above rules is Schedule K-1 that you did not include
activity without regard to the at-risk
treated as a separate activity. on lines 1 through 2c. All other
limitations. This is the amount you get
Each investment that is not a part of a when you subtract your total deductions taxpayers complete line 4 to report
trade or business is treated as a (including prior year deductions that investment interest expense from an
separate activity. were not allowed because of the at-risk at-risk activity.
rules) from your total income from the Line 4.—If you have investment interest
Specific Instructions activity for the current year. expense from your at-risk activity, first
Do not include on line 1 capital or use Form 4952, Investment Interest
If you are engaged in more than one
ordinary gains and losses from the sale Expense Deduction, to figure your
at-risk activity or in one at-risk activity
or other disposition of assets used in the allowable investment interest deduction.
and in one non-at-risk activity, you must
allocate income, gains, losses, and activity or an interest in the activity. If you have investment interest
deductions to each activity. These amounts, casualty or theft gains expense from other activities on Form
and losses, or investment interest 4952, determine the allowable
Partnerships and S corporations must
expense, are entered on lines 2a, 2b, 2c, investment interest deduction
give their partners and shareholders a
and 4. attributable to the at-risk activity and
separate statement of income,
Partners and S Corporation enter that portion on line 4 of Form
expenses, and deductions for each
Shareholders.—Enter the amount from 6198. Be sure to reduce the allowable
at-risk and non-at-risk activity.
line 1 of your current year Schedule K-1 investment interest deduction figured on
When filling in Parts I, II, and III, enter Form 4952 by the amount you carry to
only amounts that relate to the activity (plus any prior year loss from Schedule
K-1, line 1, that you could not deduct Form 6198. If you filed Form 6198 in
included on this form. Use tax 1993, include on line 4 of Form 6198
because of the at-risk rules).
Page 2
any investment interest expense from larger amount at risk. You do not need the net fair market value of property you
1993 that was limited because of the to complete Part II if you use Part III. own (not used in the activity) that
at-risk rules. secures the debt.
Line 6
Line 5 3. Loans used to finance the activity
Adjusted Basis on the First Day of Tax or to acquire property used in the
Current Year Profit (Loss) Year activity for which you are personally
If line 5 shows a current year profit, you Sole Proprietors.—Filers of Schedules liable, and qualified nonrecourse
may not have to complete the rest of C and F (Form 1040) should not reduce financing (defined on page 1). Do not
this form. Report all of the income, the amount on this line by any liabilities. enter amounts included in 2 above or on
gains, losses, and deductions shown on Get Pub. 551, Basis of Assets, for rules line 6.
lines 1 through 4 on the appropriate on adjusted basis. 4. Percentage depletion for this year
forms and schedules you will attach to Partners.—To figure the adjusted basis, deducted in excess of the adjusted
your tax return. Also, attach Form 6198 get Pub. 541, Tax Information on basis of depletable property for the
and keep a copy for your records. Partnerships. activity.
If your current year profit is from a S Corporation Shareholders.—To figure Line 9
passive activity and you have a loss the adjusted basis, get Pub. 589, Tax
from any other passive activity, get Information on S Corporations. Decreases for the Tax Year
Form 8582, Passive Activity Loss Note: If the partnership or S corporation Do not include the current year’s losses
Limitations, or Form 8810, Corporate is engaged in more than one at-r isk or deductions shown on lines 1 through
Passive Loss and Credit Limitations, activity or in both at-r isk activities and 4.
whichever applies. non-at-risk activities, you must figure the Enter amounts that decreased your
Note: Even if you have a current year part of your adjusted basis that is amount at risk during the current tax
profit on line 5, you may have recapture allocable to each at-r isk activity. See year such as:
income if you received a distribution or Aggregation or Separation of 1. Nonrecourse loans (including
had a transaction during the year that Activities on page 2 to deter mine the recourse loans changed to nonrecourse
reduced your amount at risk in the number of at-r isk activities in which your loans) other than qualified nonrecourse
activity to less than zero. See Pub. 925 partnership or S corporation is engaged. financing (defined on page 1) used to
for infor mation on the recapture rules. Line 7 finance the activity, to acquire property
If line 5 shows a current year loss, used in the activity, or to acquire your
your loss may be limited to the income Increases for the Tax Year interest in the activity. Only amounts
or gains, if any, included on lines 1, 2, Do not include the current year’s income included on line 6 should be entered on
and 3. If lines 1, 2, and 3 include or gains shown on lines 1 through 3. line 9.
income, gains, and losses, separate the Enter amounts that increased your 2. Amounts, including cash, property,
items. The income and gains are fully amount at risk during the current year or loans, protected against loss by a
reportable on your tax return. The losses such as: guarantee, stop-loss agreement, or other
and deductions are allowable (subject to 1. Net fair market value of property similar arrangement. Enter this amount
any other limitation such as the passive you own (not used in the activity) that only if it was included on line 6. Do not
activity rules) to the extent of the income secures nonrecourse loans that were include items covered by casualty
and gains. To determine the allowable used to finance the activity, to acquire insurance or insurance against tort
portion of each loss or deduction, divide property used in the activity, or to liability.
each loss or deduction from the activity acquire your interest in the activity. 3. Amounts borrowed from a person
by the total losses and deductions from Include the nonrecourse loans on line 9. who has an interest in the activity, other
the activity on line 5. Then, multiply the Generally, the net fair market value is than as a creditor, or who is related
total income and gains by this fraction. determined when the property is under section 465(b)(3)(C) to a person
Complete the rest of the form to see pledged as security for the loan. (except you) having such an interest.
how much, if any, of the excess loss can Do not enter an amount for this item if However, this does not apply to an
be deducted. (a) the nonrecourse loan was from a interest as a shareholder in the case of
Example. If Mr. Green has a Schedule C person who has an interest in the amounts borrowed by a corporation from
loss of $460 on line 1 and a Schedule D activity, other than as a creditor, or who its shareholders. Enter this amount only
gain of $310 on line 2a, line 5 would is related under section 465(b)(3)(C) to a if it was included on line 6 and not
show a current year loss of $150. Mr. person (except you) having such an included under 1 or 2 above. This may
Green would report the $310 gain on interest; and (b) the activity is described not apply (subject to pending
Schedule D and include $310 of the in 1 through 5 under At-Risk Activities regulations) to any activity other than
$460 loss on Schedule C. Mr. Green on page 1. However, (a) does not apply those described in 1 through 5 under
would complete Part II or Part III of to an interest as a shareholder in the At-Risk Activities on page 1. See Pub.
Form 6198 to see if the balance of the case of amounts borrowed by a 925 for definitions and more details.
$150 loss on line 5 is deductible. If it is, corporation from its shareholders. 4. Withdrawals and distributions
Mr. Green would include the remaining If the activity is described in 6 under during the tax year, both cash and the
loss of $150 on Schedule C. At-Risk Activities on page 1, you may adjusted basis of noncash items (less
be able to include these amounts nonrecourse liabilities to which the
Part II subject to pending regulations. noncash items are subject), including
2. Cash and the adjusted basis of assets used in the activity to repay
Simplified Computation certain debts.
other property (determined at the time of
Part II is a simplified method of figuring the contribution) contributed to the 5. Nonrecourse liabilities to which
your amount at risk. It can only be used activity during the tax year. If, however, property you contributed to the activity
if you know your adjusted basis in the you used your own assets to repay a is subject if included on line 6.
activity or the adjusted basis of your nonrecourse debt and you included an 6. Any cash or property contributed to
interest in the partnership’s or S amount in 1 above, the amount included the activity that is protected against loss
corporation’s at-risk activity. as repayments should not be more than by a guarantee, stop-loss agreement, or
Part III is a longer method of figuring the amount by which the balance of the other similar arrangement; or that is
your amount at risk but may allow a loan at the time of repayment exceeds covered by indebtedness from a person
who has an interest in the activity, other
Page 3
than as a creditor, or who is related you did not complete Part III of Form Holding mineral property may be subject
under section 465(b)(3)(C) to a person 6198 for this activity for 1993, do not to the at-risk limitations (other than the
(except you) having such an interest. complete lines 11 through 14. Enter zero special rules that apply to activities of
However, this does not apply to an on line 15 and complete the rest of holding real property).
interest as a shareholder in the case of Part III. In most cases, the effective date for
amounts borrowed by a corporation from all other at-risk activities is the first day
its shareholders. This may not apply Effective Dates of the first tax year beginning after 1978
(subject to pending regulations) to any Generally, the effective date is the first unless the activity meets one of the
activity other than those described in day of the first tax year beginning after exceptions discussed in Pub. 925.
items 1 through 5 under At-Risk 1975 if the activity is one of the However, if you are a partner or an S
Activities on page 1. Enter this amount following, and it does not meet the corporation shareholder, the date you
only if it was included on line 6. exceptions discussed in Pub. 925: became a partner or shareholder may
Line 10b ● Holding, producing, or distributing determine whether you are subject to
motion picture films or video tapes. the at-risk rules and whether you meet
Amount At Risk ● Farming (as defined in section one of the exceptions to the at-risk rules
If the amount on this line is smaller than 464(e)(1)). for certain activities. See Pub. 925 for
your overall loss from the activity (line 5), ● Leasing any section 1245 property (as more details.
you may want to complete Part III to see defined in section 1245(a)(3)). Line 11
if Part III gives you a larger amount at ● Exploring for, or exploiting, oil and gas
risk. resources. Investment in the Activity at the
Note: If the amount on line 10b (or line If the activity is exploring for, or Effective Date
19b) is zero, you may be subject to the exploiting, geothermal deposits (as Use the Line 11 Worksheet below to
recapture rules. See Pub. 925. defined in section 613(e)(2)), the effective figure your investment in the activity at
date is usually October 1, 1978, for wells the effective date. Enter all amounts as
Part III started after September 30, 1978. of the effective date. Do not complete
Generally, if the well was started before the worksheet if you are a partner or an
Detailed Computation October 1, 1978, you are not subject to S corporation shareholder. Instead, enter
If you completed Part III of Form 6198 the at-risk rules for that well. on line 11 the basis of your investment
for this activity for 1993: The activity of holding real property is in the partnership or S corporation at the
1. Skip lines 11 through 14; subject to the at-risk rules for property effective date. If the partnership or S
2. Check box b on line 15; placed in service after 1986, and for an corporation is engaged in both at-risk
3. Enter the amount from line 19b of interest acquired after 1986, in an S and non-at-risk activities, allocate your
the 1993 form on line 15; and corporation, partnership, or other investment between the at-risk and
pass-through entity engaged in an non-at-risk activities. Enter the part that
4. See the instructions for lines 16 and
activity of holding real property. An is allocable to the at-risk activity on
18 to determine the amounts to enter on
activity of holding real property does not line 11.
these lines.
include the holding of mineral property.
If the activity began on or after one of
the effective dates shown below, and

Line 11 Worksheet—Figure Your Investment in the Activity at the Effective Date


(If the activity began on or after the effective date, do not complete this worksheet.)
1 Cash on hand and in banks for the activity 1
2 Inventories for the activity 2
3a Cost or other basis of depreciable assets for the activity. (See instructions
on next page.) 3a
b Accumulated depreciation for the activity 3b
4 Adjusted basis of depreciable assets for the activity. Subtract line 3b from line 3a 4
5a Cost or other basis of depletable assets at the time contributed to the
activity 5a
b Accumulated depletion taken on or after property was contributed to the
activity 5b
6 Adjusted basis of depletable assets for the activity. Subtract line 5b from line 5a 6
7 Adjusted basis of land for the activity (net of any amortization) 7
8 Other assets for the activity 8
9 Cash basis taxpayer investment in the activity at the effective date. Add lines 1, 2, 4, 6, 7, and 8.
Enter here and on Form 6198, line 11. (Accrual basis taxpayers also complete lines 10a through 14
below.) 9
10a Trade notes and accounts receivable for the activity 10a
b Reserve for bad debts for the activity. (See instructions on next page.) 10b
11 Net receivables for the activity. Subtract line 10b from line 10a 11
12 Add lines 9 and 11 12
13 Accounts payable for the activity 13
14 Accrual basis taxpayer investment in the activity at the effective date. Subtract line 13 from line 12.
Enter here and on Form 6198, line 11 14

Page 4
Line 11 Worksheet Instructions person (except you) having such an activity including recourse loans
Lines 3a and 3b of worksheet. See the interest; and (b) the activity is described changed to nonrecourse loans. Enter
instructions for line 16, item 2, on page in 1 through 5 under At-Risk Activities this amount only if it was included on
6 for the rules on basis. Generally, the on page 1. However, (a) above does not line 11.
amounts for lines 3a and 3b of the apply to an interest as a shareholder in 2. Amounts, including cash, property,
worksheet can be taken directly from the case of amounts borrowed by a or loans, protected against loss by a
your depreciation schedule. Be sure to corporation from its shareholders. If the guarantee, stop-loss agreement, or other
use the depreciation schedule you filed activity is described in 6 under At-Risk similar arrangement outstanding at the
at the effective date, not the schedule Activities on page 1, you may be able effective date. Enter this amount only if
for the current tax year. to include these amounts, subject to it was included on line 11. Do not
pending regulations. include items covered by casualty
Line 10b of the worksheet. If you use a
reserve for bad debts, subtract from 2. Total losses from years before the insurance or insurance against tort
your accounts receivable the balance of effective date for which there were equal liability.
the reserve on the effective date. But or greater amounts not at risk at year 3. Amounts outstanding at the
only subtract up to the amount you were end. Use the Line 12 Worksheet and effective date borrowed from a person
allowed as a deduction under repealed instructions below to figure this amount. who has an interest in the activity, other
section 166(c) for years before the Make all entries on a year-by-year than as a creditor, or who is related
effective date. basis. Be sure to include amounts only under section 465(b)(3)(C) to a person
for years before the effective date. Do (except you) having such an interest.
Line 12 not accumulate totals of earlier losses or This does not apply to an interest as a
Increases at Effective Date nonrecourse debts. shareholder in the case of amounts
Caution: If you took a deduction for borrowed by a corporation from its
Enter your share of amounts such as the shareholders. Enter these amounts only
percentage depletion for an item of
following: if they were included on line 11 and not
depletable property in excess of the
1. Net fair market value of your own adjusted basis of the property in a year included under 1 or 2 above. Subject to
property (not used in the activity) that for which you had a loss for the activity, pending regulations, this may not apply
secures nonrecourse loans used to subtract the amount of the excess from to any activity other than those
finance the activity, to acquire property the loss for that year. described in 1 through 5 under At-Risk
used in the activity, or to acquire your Activities on page 1. See Pub. 925 for
interest in the activity that will be Line 14 definitions and more details.
included on line 14. Generally, the net Decreases at Effective Date 4. If you are not an S corporation
fair market value is determined when the shareholder, also include liens and
property is pledged as security for a Enter your share of amounts such as the
following: encumbrances on property you
loan. Do not enter an amount for this contributed to the activity that are
item if (a) the nonrecourse loan was 1. Nonrecourse loans outstanding at included on line 11. If you are an S
from a person who has an interest in the the effective date used to finance the corporation shareholder, do not include
activity, other than as a creditor, or who activity, to acquire property used in the any loans that were assumed by the
is related under section 465(b)(3)(C) to a activity, or to acquire your interest in the

Line 12 Worksheet—Figure Your Total Losses From Years Before the Effective
Date for Which There Were Equal or Greater Amounts Not At Risk at Year End
(b) (c) (d)
(a) Total amounts from (e) (f)
Amount of loss for Amount not at risk at
Year column (f) for all Subtract (d) from (c) Smaller of (b) or (e)
the year end of year
prior years

Total (include on Form 6198, line 12) ©

Worksheet Instructions For 1971, John would enter $300 in column (b), $1,000 in
column (c), $500 in column (d) (the total amount from column
Use the first line of the worksheet for the first year in which (f) for all prior years), $500 in column (e), and $300 in
you had a loss and amounts not at risk. List each column (f).
subsequent year in order.
For 1975, John would enter $500 in column (b), $1,000 in
Column (d). For each year after the first year, enter the total column (c), $800 in column (d) (the total amount from
amount in column (f) for all prior years. column (f) for all prior years ($500 + $300)), $200 in column
Example. John had losses in 1970, 1971, and 1975. At the (e), and $200 in column (f). Of the $500 loss for 1975, only
end of each of those years, John had outstanding amounts $200 is a loss for which there was an equal or greater
not at risk of $1,000. John had losses of $500 in 1970, $300 amount not at risk at year end.
in 1971, and $500 in 1975. John’s total loss from years before the effective date for
For 1970, John would enter $500 in column (b), $1,000 in which there were equal or greater amounts not at risk at year
column (c), $1,000 in column (e), and $500 in column (f). end is $1,000 (the total of the amounts in column (f)).

Page 5
corporation or that were liens or property used in the activity, or to include the current year’s income or
encumbrances on property you acquire your interest in the activity. gains.
contributed to the corporation if the Generally, the net fair market value is If you are not an S corporation
corporation took the property subject to determined when the property is shareholder, enter the total net income
the debt. pledged as security for the loan. from the activity since the effective date,
5. Any cash or property contributed to Do not enter the net fair market value taking into account only those years the
the activity included on line 11 that is if (a) the nonrecourse loan was from a activity had net income. For years since
covered by nonrecourse indebtedness; person who has an interest in the the effective date that the activity had a
protected against loss by a guarantee, activity, other than as a creditor, or was net loss, see the instructions for line 18,
stop-loss agreement, or similar related under section 465(b)(3)(C) to a item 5.
arrangement; or covered by person (except you) having such an If you are an S corporation
indebtedness from a person who has an interest; and (b) the activity is described shareholder, enter your total net income
interest in the activity, other than as a in 1 through 5 under At-Risk Activities from the activity for profit years since
creditor, or who is related under section on page 1. However, (a) does not apply the effective date. Income from the
465(b)(3)(C) to a person (except you) to an interest as a shareholder in the activity includes gain recognized under
having such an interest. This does not case of amounts borrowed by a section 357(c) on contributions of
apply to an interest as a shareholder in corporation from its shareholders. (See property to the activity. Also included are
the case of amounts borrowed by a Pub. 925 for definitions.) If the activity is distributions from the activity as well as
corporation from its shareholders (see described in 6 under At-Risk Activities your share of the activity’s taxable
item 3 above). on page 1, you may be able to include income.
these amounts, subject to pending 5. Gain recognized on the transfer or
Line 15 regulations. disposition of all or part of the activity or
Amount At Risk 2. Cash and the adjusted basis of your interest in the activity since the
If you completed Part III of Form 6198 other property contributed to the activity effective date.
for 1993: since the effective date. Adjusted basis 6. Amounts you had to include in
● Check box b; and is the basis that would be used in income since the effective date because
determining the amount of loss if the your amount at risk was less than zero.
● Enter the amount from line 19b of the property were sold immediately after you
1993 form on this line. 7. All money from outside the activity
contributed it to the activity. See Pub. used since the effective date to repay
Do not enter the amount from line 551 for more details. If you are an S
10b of the 1993 form. Do not include loans included on lines 14 and 18. If,
corporation shareholder and you however, you used your own assets to
any amounts that are not at risk on this contributed property to the corporation
line. repay a nonrecourse debt and you
subject to a liability, including a liability included an amount in 1 above, the
Line 16 you are personally required to repay, amounts included as repayments should
then you must reduce the total of the not exceed the amount by which the
Increases adjusted bases of all the property you balance of the loan at the time of
If you completed Part III of Form 6198 contributed by the total of all liabilities repayment exceeds the net fair market
for 1993: the property was subject to. This applies value of property you own (not used in
● Check box b; and whether the corporation took the the activity) that secures the debt.
● Enter on this line any increases property subject to, or assumed, the
8. Percentage depletion deducted in
described in 1 through 9 below that liabilities.
excess of the adjusted basis of the
occurred since the end of your 1993 tax 3. Loans used to finance the activity, depletable property for the activity since
year. to acquire property used in the activity, the effective date. Use the Line 16
If you completed Part III of the 1993 or to acquire your interest in the activity Worksheet below to figure this amount.
form, “since effective date” means since for which you are personally liable, and Be sure to include the amount for the
the end of your 1993 tax year. qualified nonrecourse financing (defined current year.
on page 1). (Do not include amounts
Enter your share of amounts such as 9. If you are an S corporation
included in 2 above.)
the following: shareholder, enter the loans you made to
4. Total net income from this activity your S corporation since the effective
1. Net fair market value of property
since the effective date (excess of all date. Do not include notes that you have
you own (not used in the activity) that
items of income received or accrued given to the activity that are still
secures nonrecourse loans that were
over the allowable deductions). Do not outstanding.
acquired since the effective date and
enter any amount less than zero. Do not
used to finance the activity, to acquire

Line 16 Worksheet (Item 8)—Figure Percentage Depletion Deducted in Excess of


the Adjusted Basis of Depletable Property
(c) (d)
(a) (b) Adjusted basis of depletable property Excess percentage depletion
Year Percentage depletion deduction before any depletion deduction for (column (b) minus column (c))
the year but not less than zero

Total ©

Page 6
Line 18 of property withdrawn by the amount, at Note: For loans, enter the amount of the
the time of withdrawal, of any loan you incurred, not the current
Decreases nonrecourse liability to which the balance of the loan.
If you completed Part III of Form 6198 property is subject.
for 1993: Line 19b
Do not include any money from the
● Check box b; and activity used to repay loans described in Amount At Risk
● Enter on this line any decreases the instructions for line 14. Include If the amount on this line is zero, you
described in 1 through 9 below that amounts that were withdrawn and may be subject to the recapture rules.
occurred since the end of your 1993 tax recontributed. Recontributed amounts See Pub. 925.
year. should also be included on line 16.
If you completed Part III of the 1993 Partners and S corporation Part IV
form, “since the effective date” in 1 shareholders who recognize gain on
through 9 below means since the end of distributions from the partnership or S Deductible Loss
your 1993 tax year. corporation should include these
Line 21
Enter your share of amounts such as distributions on line 18. They should also
the following: take them into account as income from Deductible Loss
1. Cash, property, or borrowed the activity on line 16 unless the gain is Note: When compar ing lines 5 and 20,
amounts protected against loss by a recognized in the current year. treat the loss on line 5 as a positive
guarantee, stop-loss agreement, or other 4. Recourse loans (and qualified number only for purposes of determining
similar arrangement entered into since nonrecourse financing) changed to the amount to enter on line 21.
the effective date. Do not include items nonrecourse loans since the effective If the loss on line 5 is equal to or less
covered by casualty insurance or date. than the amount on line 20, report the
insurance against tort liability. Enter this 5. Total losses from this activity items in Part I in full on your return,
amount only if it was included on line deducted since the effective date. Take subject to any other limitations such as
16. See the instructions at the beginning into account only those years in which the passive activity and capital loss
of Part III on page 4 for information on you had a net loss. Do not include the limitations. Follow the instructions for
effective dates. current year’s losses or deductions. your tax return.
2. Amounts borrowed since the Also, do not include losses or If the loss on line 5 is more than the
effective date from a person who has an deductions you could not deduct amount on line 20, you must limit your
interest in the activity, other than as a because of the at-risk rules. deductible loss to the amount on line 20,
creditor, or is related under section Note: The 1993 line 21 deductible loss subject to any other limitations.
465(b)(3)(C) to a person (except you) reduces your at-r isk investment as of the Examples. A. If line 5 is a loss of ($400)
having such an interest. However, this beginning of your 1994 tax year. and line 20 is $1,000, enter ($400) on
does not apply to an interest as a 6. Any nonrecourse liabilities to which line 21. B. If line 5 is a loss of ($1,600)
shareholder in the case of amounts property you contributed to the activity and line 20 is $1,200, enter ($1,200) on
borrowed by a corporation from its since the effective date is subject. line 21. C. If line 5 is a loss of ($800)
shareholders. Enter this amount only if it 7. Any other at-risk amounts included and line 20 is zero, enter zero on line 21.
was included on line 16 and the amount on line 15 that changed to amounts that If the amount on line 21 is made up of
was not included under 1 above. This are not at risk since the effective date. only one deduction or loss item, report
may not apply (subject to pending 8. If you are an S corporation on your return the amount shown on line
regulations) to any activity other than shareholder, do not include any loans 21, subject to any other limitations.
those described in 1 through 5 under that were assumed by the corporation or Follow the instructions for your tax
At-Risk Activities on page 1. See the that were liens or encumbrances on return to determine where to report the
instructions at the beginning of Part III property you contributed to the amount on your return.
on page 4 for information on effective corporation since the effective date if If the amount on line 21 is made up of
dates. the corporation took the property more than one loss item in Part I (such
3. Cash and adjusted basis of other subject to the debt. as a Schedule C loss and a Schedule D
property withdrawn or distributed since 9. Any cash or property contributed to loss), a portion of each such deduction
the effective date. The adjusted basis is the activity since the effective date that or loss item is allowed (subject to other
the basis that would be used to figure is protected against loss by a guarantee, limitations) for the year. Determine this
the loss if the property had been sold by stop-loss agreement, or other similar portion by multiplying the loss on line 21
the activity at the time you withdrew it or arrangement; or that is covered by by a fraction. You figure the fraction by
it was distributed to you. indebtedness from a person who has an dividing each item of deduction or loss
If you are an S corporation interest in the activity, other than as a from the activity by the total of all
shareholder and the property is subject creditor, or is related under section deduction and loss items from the
to debt that would be included on line 465(b)(3)(C) to a person (except you) activity on line 5. The remaining portion
14 (or on this line except for the fact having such an interest. However, this of each deduction or loss item from the
that there are liens or encumbrances on does not apply to an interest as a activity is disallowed and must be
the property in the activity), reduce the shareholder in the case of amounts carried over to next year.
basis of the distributed property by the borrowed by a corporation from its
amount of the debt. shareholders.
If you are not an S corporation
shareholder, reduce the adjusted basis

Printed on recycled paper


Page 7