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フォーム6198、リスク制限の手順 フォーム6198(2009年11月改訂)以降での使用

2020年1月改定

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Department of the Treasury  
Internal Revenue Service  
Instructions for Form 6198  
At-Risk Limitations  
For use with Form 6198 (Rev. November 2009) or later revision  
(Rev. January 2020)  
Section references are to the Internal Revenue  
Code unless otherwise noted.  
section 1245(a)(3).  
3. Amounts borrowed for use in the  
activity from a person who has an  
interest in the activity other than as a  
creditor or who is related under section  
465(b)(3)(C) to a person (except you)  
having such an interest. However, this  
does not apply to (a) amounts borrowed  
by a corporation from a person whose  
only interest in the activity is as a  
shareholder of the corporation, or (b)  
amounts borrowed after May 3, 2004,  
and secured by real property used in the  
activity of holding real property (other  
than mineral property) that, if  
Certain equipment leasing  
activities by closely held C  
General Instructions  
!
CAUTION  
corporations are not subject to  
the at-risk rules. See sections 465(c)(4),  
(5), and (6).  
Purpose of Form  
Use Form 6198 to figure:  
The profit (loss) from an at-risk  
4. Exploring for or exploiting oil and  
gas resources.  
activity for the current year  
(Part I),  
The amount at risk for the current  
year (Part II or Part III), and  
5. Exploring for or exploiting  
geothermal deposits, as defined in  
section 613(e)(2).  
The deductible loss for the current  
year (Part IV).  
nonrecourse, would be qualified  
nonrecourse financing. See Pub. 925 for  
definitions.  
The at-risk rules of section 465 limit  
the amount of the loss you can deduct  
to the amount at risk.  
6. Any other activity that is not  
included in (1) through (5) above.  
4. Any cash or property contributed  
to the activity or to your interest in the  
activity that is:  
For more details, see Pub. 925,  
Exception. Holding real property  
placed in service before 1987 and  
holding an interest acquired before  
1987 in a partnership, an S corporation,  
or other pass-through entity already  
engaged in an activity of holding real  
property before 1987 are not affected by  
the at-risk rules. This exception does  
not apply to holding mineral property.  
Passive Activity and At-Risk Rules.  
a. Financed through nonrecourse  
indebtedness or protected against loss  
through a guarantee, stop-loss  
agreement, or other similar  
Who Must File  
Form 6198 is filed by individuals  
(including filers of Schedules C, E, and  
F (Form 1040 or 1040-SR)), estates,  
trusts, and certain closely held C  
arrangement; or  
b. Borrowed from a person who has  
an interest in the activity other than as a  
creditor or who is related under section  
465(b)(3)(C) to a person (except you)  
having such an interest. However, this  
does not apply to (i) amounts borrowed  
by a corporation from a person whose  
only interest in the activity is as a  
shareholder of the corporation, or (ii)  
amounts borrowed after May 3, 2004,  
and secured by real property used in the  
activity of holding real property (other  
than mineral property) that, if  
corporations described in section 465(a)  
(1)(B), as modified by section 465(a)(3).  
A special exception to the  
at-risk rules applies to a  
!
File Form 6198 if during the tax year  
you, a partnership in which you were a  
partner, or an S corporation in which  
you were a shareholder had any  
CAUTION  
qualifying business of a  
qualified C corporation. See Pub. 925  
for details.  
amounts not at risk (see Amounts Not at  
Risk, later) invested in an at-risk activity  
(defined below) that incurred a loss.  
Amounts Not at Risk  
You are not considered at risk for any of  
the following.  
You must file Form 6198 if you are  
engaged in an activity included in (6)  
under At-Risk Activities (see At-Risk  
Activities below) and you have  
1. Nonrecourse loans used to  
finance the activity, to acquire property  
used in the activity, or to acquire your  
interest in the activity (unless the  
nonrecourse, would be qualified  
nonrecourse financing. See Pub. 925 for  
definitions.  
borrowed amounts described in (3)  
under Amounts Not at Risk (see  
nonrecourse loan is secured by your  
own property that is not used in the  
activity). However, you are considered  
at risk for qualified nonrecourse  
You do not have to file Form 6198 if  
you are engaged in an activity included  
in (6) under At-Risk Activities, earlier,  
and you only have amounts borrowed  
before May 4, 2004, that are described  
in (3) above.  
At-Risk Activities  
financing secured by real property used  
in the activity of holding real property  
(other than mineral property). See  
The at-risk limitation rules apply to  
losses from the following activities  
carried on as a trade or business or for  
the production of income.  
Qualified Nonrecourse  
Financing  
2. Cash, property, or borrowed  
amounts used in the activity that are  
protected against loss by a guarantee,  
stop-loss agreement, or other similar  
arrangement (excluding casualty  
insurance and insurance against tort  
liability).  
1. Holding, producing, or distributing  
Qualified nonrecourse financing is  
financing for which no one is personally  
liable for repayment and is:  
motion picture films or videotapes.  
2. Farming, as defined in  
section 464(e)(1).  
Borrowed by you in connection with  
holding real property;  
3. Leasing any section 1245  
property, as defined in  
Dec 10, 2019  
Cat. No. 50013J  
     
Secured by real property used in the  
described in (1) through (5) under  
Schedule C (Form 1040 or 1040-SR) in  
Part V, Other Expenses, and identify it  
as a prior year loss.  
Partners and S corporation share-  
holders. If you have a loss or a  
deduction from an earlier tax year that  
you could not deduct because of the  
at-risk rules, these losses and  
activity;  
At-Risk Activities, earlier.  
Not convertible debt; and  
Separation rules. Your activity with  
respect to each film, videotape, section  
1245 property that is leased or held for  
lease, farm, holding of real property, oil  
and gas property (as defined in section  
614), or geothermal property (as  
defined in section 614) that is not  
aggregated with other activities under  
the above rules is treated as a separate  
activity.  
Loaned or guaranteed by any federal,  
state, or local government, or borrowed  
by you from a qualified person (defined  
below).  
See Regulations section 1.465-27 for  
details, including rules for partnership  
liabilities and disregarded entities. This  
section is effective for any financing  
incurred on or after August 4, 1998, but  
taxpayers can apply the section  
retroactively.  
deductions must be included in the  
current year amounts you enter in  
Part I. For example, if your prior year  
Schedule K-1 had a $1,500 loss in  
box 1, but because of the at-risk rules  
your loss was limited to $500, include  
both the $1,000 loss from your prior  
year and the amount from your current  
year Schedule K-1 on line 1 of Form  
6198.  
Each investment that is not a part of  
a trade or business is treated as a  
separate activity.  
A qualified person is a person who  
actively and regularly engages in the  
business of lending money (for  
example, a bank or savings and loan  
association).  
Specific Instructions  
Closely held corporations. A closely  
held corporation must apply the  
If you are engaged in more than one  
at-risk activity or in both at-risk activities  
and not-at-risk activities, you must  
allocate income, gains, losses, and  
deductions to each activity.  
limitation on the deduction for interest  
expense under section 163(j) before  
applying the at-risk limitations.  
A qualified person is not:  
A person related to you unless the  
person would be a qualified person but  
for the relationship and the nonrecourse  
financing is commercially reasonable  
and on the same terms as loans to  
unrelated persons,  
Line 1  
Ordinary Income (Loss)  
Partnerships and S corporations must  
give their partners and shareholders a  
separate statement of income,  
Taxpayers other than partners or  
S corporation shareholders. Enter  
your ordinary income or loss from the  
at-risk activity without regard to the  
at-risk limitations. This is the amount  
you get when you subtract your total  
deductions (including prior year  
deductions that were not allowed  
because of the at-risk rules) from your  
total income from the activity for the  
current year.  
Do not include on line 1 capital or  
ordinary gains and losses from the sale  
or other disposition of assets used in the  
activity or of an interest in the activity.  
These amounts, casualty or theft gains  
and losses, and investment interest  
expense are entered on lines 2a, 2b, 2c,  
and 4.  
expenses, and deductions for each  
at-risk and not-at-risk activity.  
The seller of the property (or a person  
related to the seller), or  
A person who receives a fee as a  
When filling in Parts I, II, and III, enter  
only amounts that relate to the activity  
included on this form. Use accepted tax  
accounting methods to figure the  
amounts to enter.  
If you are a partner or an S corporation  
shareholder, enter any items for the  
activity that are from your investment in  
the activity or were passed through to  
you on Schedule K-1 or a similar  
statement.  
result of your investment in the property  
(or a person related to that person).  
Aggregation or Separation  
of Activities  
File one form if your activities are listed  
under the aggregation rules. File a  
separate form for each activity if your  
activities are listed under the separation  
rules.  
Aggregation rules. All section 1245  
properties that are leased or held for  
lease and placed in service in any tax  
year of a partnership or an S corporation  
are treated as one activity. A partner in a  
partnership or an S corporation  
Description of activity. After the  
description of the activity, if applicable,  
enter the name and identifying number  
of the partnership or S corporation.  
Part I—Current Year Profit  
(Loss) From the Activity,  
Including Prior Year  
Partners and S corporation share-  
holders. Enter the amount from box 1  
of your current year Schedule K-1 (Form  
1065 or Form 1120-S) (plus any prior  
year ordinary loss that you could not  
deduct because of the at-risk rules).  
shareholder can aggregate and treat as  
a single activity all of the properties of  
that partnership or S corporation that  
are included within each of categories  
(1), (2), (4), and (5) under At-Risk  
Activities, earlier.  
Nondeductible Amounts  
Taxpayers other than partners or  
S corporation shareholders. If you  
have losses or deductions from an  
Lines 2a, 2b, and 2c  
Gain (Loss)  
Combine long- and short-term capital  
gains and losses and ordinary gains and  
losses from the sale or other disposition  
of assets used in the activity or of your  
interest in the activity. Enter gains and  
Activities described in (6) under  
At-Risk Activities , earlier, that constitute earlier tax year that you could not  
a trade or business are treated as one  
activity if (a) the taxpayer actively  
participates in the management of that  
trade or business, or (b) the business is  
carried on by a partnership or an S  
corporation and 65% or more of the  
losses for the tax year are allocable to  
persons who actively participate in the  
management of the trade or business.  
Similar rules apply to activities  
deduct because of the at-risk rules,  
include those amounts on the  
appropriate form or schedule of your  
current year tax return before starting  
Part I. For example, if 2020 is the  
current year, and your 2019 Schedule C losses without regard to the at-risk  
(Form 1040 or 1040-SR) had a $1,500  
loss on line 31, but because of the  
at-risk rules your loss was limited to  
$500, include the $1,000 on your 2020  
limitations, the limitation on capital  
losses, or the passive activity loss  
limitations. If more than one item is  
-2-  
 
included on a line, attach a statement  
describing each item  
included on line 8 of Form 4952, and  
enter that amount on line 4 of  
or 1040-SR) gain of $3,100 on line 2a.  
Line 5 shows a current year loss of  
$1,500. Jill reports the $3,100 gain on  
Schedule D (Form 1040 or 1040-SR)  
and can deduct $3,100 of the $4,600  
loss on Schedule C (Form 1040 or  
1040-SR). Jill completes Part II or Part  
III of Form 6198 and determines that  
only $600 of the $1,500 excess loss on  
line 5 is deductible in the current year.  
She replaces the $4,600 loss first  
Form 6198. You must reduce the  
allowable investment interest deduction  
on Form 4952 by the amount you carry  
to Form 6198. If you filed Form 6198 for  
the prior tax year, include on line 4 of  
your current year Form 6198 any  
investment interest expense from the  
prior tax year that was limited because  
of the at-risk rules.  
Do not include amounts on  
lines 2a and 2b that are included on  
line 2c. Enter the form number or  
schedule letter to the left of the entry  
space for line 2c. For example, if you file  
Form 4684, Casualties and Thefts, and  
carry amounts from that form to Form  
4797, Sales of Business Property, either  
(a) enter the amounts attributable to the  
activity from Form 4684 on line 2c and  
enter “Form 4684” on the dotted line  
next to the entry space, or (b) enter the  
amount attributable to the activity  
entered on Schedule C (Form 1040 or  
1040-SR) with $3,700 ($3,100 + $600),  
the total loss allowed in the current year.  
Line 5  
Current Year Profit (Loss)  
If line 5 shows a current year profit, you  
may not have to complete the rest of  
this form. Report all of the income,  
gains, deductions, and losses shown on  
lines 1 through 4 on the forms and  
schedules normally used, and attach  
them to your tax return. Also attach  
Form 6198 and keep a copy for your  
records.  
Part II—Simplified  
Computation of Amount At  
Risk  
carried from Form 4684 to Form 4797  
on line 2b. If you carry a loss from Form  
4684 to Schedule A (Form 1040 or  
1040-SR), enter on line 2c either the  
loss from Schedule A (Form 1040 or  
1040-SR) or the loss from Form 4684.  
Taxpayers other than partners or  
S corporation shareholders. Include  
on your current year Schedule D (Form  
1040 or 1040-SR), Form 4797, or other  
forms and schedules any prior year  
losses that you could not deduct  
because of the at-risk rules.  
Partners and S corporation share-  
holders. Include on lines 2a, 2b, and  
2c your current year gains and losses  
and prior year losses attributable to the  
activity that you could not deduct  
because of the at-risk rules.  
Part II is a simplified method of figuring  
your amount at risk. It can be used only  
if you know your adjusted basis in the  
activity or in your interest in the  
partnership's or S corporation's at-risk  
activity.  
If your current year profit is from a  
passive activity and you have a loss  
from any other passive activity, see the  
Instructions for Form 8582, Passive  
Activity Loss Limitations, or the  
Part III is a longer method of figuring  
your amount at risk, which may allow a  
larger amount at risk. You do not need  
to complete Part II if you use Part III.  
Instructions for Form 8810, Corporate  
Passive Activity Loss and Credit  
Limitations, whichever applies.  
Line 6  
Adjusted Basis on the First Day of  
Tax Year  
Even if you have a current year  
profit on line 5, you may have  
!
Sole proprietors. Filers of Schedules  
C and F (Form 1040 or 1040-SR) must  
not reduce the amount on this line by  
any liabilities. See Pub. 551, Basis of  
Assets, for rules on adjusted basis.  
CAUTION  
recapture income if you  
received a distribution or had a  
transaction during the year that reduced  
your amount at risk in the activity to less  
than zero at the close of the tax year.  
See Pub. 925 for information on the  
recapture rules.  
Line 3  
Other Income and Gains From the  
Activity  
If you were a partner or S corporation  
shareholder, include on line 3 other  
income and gains from Schedule K-1  
that you did not include on lines 1  
through 2c.  
Partners. To figure the adjusted basis,  
see Pub. 541, Partnerships.  
S corporation shareholders. To  
figure the adjusted basis, see the  
Instructions for Form 1120-S.  
If line 5 shows a current year loss,  
your loss may be limited to the income  
or gains, if any, included on lines 1, 2,  
and 3. Separate the items of income,  
gains, deductions, and losses on lines 1  
through 4. The income and gains are  
fully reportable on your tax return. The  
deductions and losses are allowable  
(subject to any other limitation such as  
the passive activity rules) to the extent  
of the income and gains. To determine  
the allowable portion of each deduction  
or loss, divide each deduction or loss  
from the activity by the total loss from  
the activity on line 5. Then, multiply the  
total income and gains by this fraction.  
If the partnership or S  
Line 4  
corporation is engaged in more  
!
Other Deductions and Losses  
From the Activity  
CAUTION  
than one at-risk activity or in  
both at-risk activities and not-at-risk  
activities, you must figure the part of  
your adjusted basis that is allocable to  
each at-risk activity. See Aggregation or  
Separation of Activities, earlier, to  
determine each at-risk activity in which  
a partnership or S corporation is  
engaged.  
If you were a partner or S corporation  
shareholder, include on line 4 other  
deductions and losses from  
Schedule K-1 that you did not include  
on lines 1 through 2c.  
If you have investment interest expense  
from your at-risk activity, first complete  
Form 4952, Investment Interest  
Line 7  
Increases for the Tax Year  
Expense Deduction, to figure your  
allowable investment interest deduction.  
Complete the rest of the form to see  
how much, if any, of the excess loss can  
be deducted.  
Example. Jill has a Schedule C  
(Form 1040 or 1040-SR) loss of $4,600  
on line 1 and a Schedule D (Form 1040  
Do not include the current year income  
If you have investment interest  
expense from other activities on  
Form 4952, determine the allowable  
investment interest deduction  
or gains shown on lines 1 through 3.  
Include changes during the current  
tax year in amounts that increase your  
amount at risk, such as the following.  
attributable to the at-risk activity  
-3-  
 
1. Net fair market value (FMV) of  
property you own (not used in the  
activity) that secures nonrecourse loans  
used to finance the activity, to acquire  
property used in the activity, or to  
to finance the activity, to acquire  
property used in the activity, or to  
lines 11 through 14. Then, see the  
instructions for lines 15 and 16, and the  
instructions for line 18, later, to  
acquire your interest in the activity. Only determine the amounts to enter on  
amounts included on line 6 can be  
those lines.  
If the activity began on or after one of  
acquire your interest in the activity.  
Include the nonrecourse loans on line 9  
(if included on line 6). Generally, the net  
FMV is determined when the property is  
pledged as security for the loan.  
entered on line 9.  
2. Cash, property, or borrowed  
amounts protected against loss by a  
guarantee, stop-loss agreement, or  
other similar arrangement. Enter this  
amount only if it was included on line 6.  
Do not include items covered by  
casualty insurance or insurance against  
tort liability.  
the effective dates shown below and  
you did not complete Part III of Form  
6198 for this activity for the prior tax  
year, skip lines 11 through 14. Enter -0-  
on line 15 and complete the rest of Part  
III.  
Do not enter the net FMV if (a) the  
nonrecourse loan was from a person  
who has an interest in the activity other  
than as a creditor or who is related  
under section 465(b)(3)(C) to a person  
(except you) having such an interest,  
and (b) the activity is described in (1)  
through (5) (or (6) for amounts borrowed  
after May 3, 2004) under At-Risk  
Activities, earlier. However, (a) does not  
apply to amounts borrowed by a  
corporation from a person whose only  
interest in the activity is as a  
Effective Dates  
Generally, the effective date is the first  
day of the first tax year beginning after  
1975 if the activity is described in (1)  
through (4) under At-Risk Activities,  
earlier.  
3. Amounts borrowed from a person  
who has an interest in the activity other  
than as a creditor or who is related  
under section 465(b)(3)(C) to a person  
(except you) having such an interest.  
This does not apply to (a) amounts  
borrowed by a corporation from a  
person whose only interest in the  
If the activity is described in (5) under  
At-Risk Activities, earlier, the effective  
date is usually October 1, 1978, for  
wells started after September 30, 1978.  
Generally, a well started before October  
1, 1978, is not subject to the at-risk  
rules.  
activity is as a shareholder of the  
shareholder of the corporation. See  
Pub. 925 for definitions.  
corporation, or (b) amounts borrowed  
after May 3, 2004, and secured by real  
property used in the activity of holding  
2. Cash and the adjusted basis of  
other property (determined at the time of real property (other than mineral  
the contribution) contributed to the  
activity during the tax year. However, if  
you used your own assets to repay a  
nonrecourse debt and you included an  
amount in (1) above, the amount  
property) that, if nonrecourse, would be  
qualified nonrecourse financing. Enter  
these amounts only if they were  
The activity of holding real property is  
subject to the at-risk rules for property  
placed in service after 1986, and for an  
interest acquired after 1986 in an S  
included on line 6 and not included  
under (1) or (2) above. This applies only corporation, partnership, or other  
included as repayments cannot be more to activities described in (1) through (5)  
pass-through entity engaged in an  
activity of holding real property. An  
activity of holding real property does not  
include the holding of mineral property.  
Holding mineral property may be  
subject to at-risk limitations other than  
the special rules that apply to activities  
of holding real property.  
than the amount by which the balance of under At-Risk Activities, earlier. See  
the loan at the time of repayment  
exceeds the net FMV of property you  
own (not used in the activity) that  
secures the debt.  
Pub. 925 for definitions and more  
details.  
4. Withdrawals and distributions  
during the tax year — both cash and the  
adjusted basis of noncash items (less  
nonrecourse liabilities to which the  
noncash items are subject) — including  
assets used in the activity to repay  
certain debts.  
5. Nonrecourse liabilities included  
on line 6 of property you contributed to  
the activity.  
3. Loans used to finance the  
activity, to acquire property used in the  
activity, or to acquire your interest in the  
activity for which you are personally  
liable, and qualified nonrecourse  
In most cases, the effective date for  
all other at-risk activities is the first day  
of the first tax year beginning after 1978.  
financing (defined earlier under  
If you are a partner or an S  
corporation shareholder, the date you  
became a partner or shareholder may  
determine whether you are subject to  
the at-risk rules.  
not enter amounts included in (2) under  
Line 10b  
Amount At Risk  
If the amount on this line is smaller than  
your overall loss from the activity  
(line 5), you may want to complete Part  
III to see if Part III gives you a larger  
amount at risk.  
4. Percentage depletion for this year  
deducted in excess of the adjusted  
basis of depletable property for the  
activity.  
Line 11  
Investment in the Activity at the  
Effective Date  
Line 9  
Decreases for the Tax Year  
Do not include the current year  
deductions or losses shown on lines 1  
through 4.  
Taxpayers other than partners or  
S corporation shareholders. Use the  
Line 11 Worksheet and its instructions  
to figure your investment in the activity  
at the effective date. Enter all amounts  
as of the effective date.  
Partners and S corporation share-  
holders. Enter on line 11 the basis of  
your investment in the partnership or S  
corporation at the effective date. If the  
partnership or S corporation is engaged  
in both at-risk and not-at-risk activities,  
If the amount on line 10b is  
zero, you may be subject to the  
!
CAUTION  
recapture rules. See Pub. 925.  
Include changes during the current  
tax year in amounts that decrease your  
amount at risk, such as the following.  
1. Nonrecourse loans (including  
recourse loans changed to nonrecourse  
loans) other than qualified nonrecourse  
financing (defined earlier under  
Part III—Detailed  
Computation of Amount At  
Risk  
If you completed Part III of Form 6198  
for this activity for the prior tax year, skip  
-4-  
allocate your investment between the  
at-risk and not-at-risk activities. Enter  
the part that is allocable to the at-risk  
activity on line 11.  
Line 11 Worksheet—Figure Your Investment in the Activity at the  
Effective Date  
Keep for Your Records  
(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.  
2.  
Inventories for the activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
3a.  
Cost or other basis of depreciable assets for the activity (see instructions  
below) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
Accumulated depreciation for the activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
3a.  
3b.  
b.  
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.  
5b.  
b.  
Accumulated depletion taken on or after property was contributed to the  
activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
6.  
7.  
8.  
9.  
Adjusted basis of depletable assets for the activity. Subtract line 5b from line 5a . . . . . . . . . . . . . . . . . . . . . . . . . .  
Adjusted basis of land for the activity (net of any amortization) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
Other assets for the activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
6.  
7.  
8.  
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 to figure the amount to enter  
on Form 6198, line 11.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
9.  
10a. Trade notes and accounts receivable for the activity . . . . . . . . . . . . . . . . . . . . .  
10a.  
b.  
11.  
12.  
13.  
14.  
Reserve for bad debts for the activity (see instructions below) . . . . . . . . . . . . . .  
10b.  
Net receivables for the activity. Subtract line 10b from line 10a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
Add lines 9 and 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
Accounts payable for the activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
Accrual basis taxpayer investment in the activity at the effective date. Subtract line 13 from line 12. Enter here and on  
11.  
12.  
13.  
Form 6198, line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.  
Worksheet Instructions  
Lines 3a and 3b. See the instructions for line 16, item (2), earlier, for the rules on basis. Generally, the amounts for lines 3a and 3b can be taken directly from your  
depreciation schedule. Use the depreciation schedule you filed at the effective date, not the schedule for the current tax year.  
Line 10b. If you use a reserve for bad debts, subtract from your accounts receivable the balance of the reserve on the effective date. But only subtract up to the amount you  
were allowed as a deduction under repealed section 166(c) for years before the effective date.  
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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  
Keep for Your Records  
(a)  
Year  
(b)  
Amount of loss for the  
year  
(c)  
Amount not at risk at end  
of year  
(d)  
(e)  
Subtract (d) from (c)  
(f)  
Total amounts from  
column (f) for all prior years  
Smaller of (b) or (e)  
Total (include on Form 6198, line 12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
Worksheet Instructions  
Use the first line of the worksheet for the first year in which you had a loss and amounts not at risk. List each subsequent year in order.  
Column (d). For each year after the first year, enter the total amount in column (f) for all prior years.  
Example. John had losses in 1970, 1971, and 1975. At the end of each of those years, John had outstanding amounts not at risk of $1,000. John had losses of $500 in 1970,  
$300 in 1971, and $500 in 1975.  
For 1970, John enters $500 in column (b), $1,000 in column (c), $1,000 in column (e), and $500 in column (f).  
For 1971, John enters $300 in column (b), $1,000 in column (c), $500 in column (d) (the total amount from column (f) for all prior years), $500 in column  
(e), and $300 in column (f).  
For 1975, John enters $500 in column (b), $1,000 in column (c), $800 in column (d) (the total amount from column (f) for all prior years ($500 + $300)),  
$200 in column (e), and $200 in column (f). Of the $500 loss for 1975, only $200 is a loss for which there was an equal or greater amount not at risk at  
year end.  
John's total loss from years before the effective date for which there were equal or greater amounts not at risk at year end is $1,000 (the total of the amounts  
in column (f)).  
year end. Use the Line 12 Worksheet  
at the effective date. Enter this amount  
Line 12  
Increases at Effective Date  
and its instructions to figure this amount. only if it was included on line 11. Do not  
include items covered by casualty  
Enter your share of amounts such as the  
insurance or insurance against tort  
Make all entries on a year-by-year  
basis. Include amounts only for years  
before the effective date. Do not  
accumulate totals of earlier losses or  
nonrecourse debts.  
following.  
liability.  
1. Net FMV of your own property  
(not used in the activity) that secures  
nonrecourse loans used to finance the  
activity, to acquire property used in the  
activity, or to acquire your interest in the  
activity that will be included on line 14.  
Generally, the net FMV is determined  
when the property is pledged as  
security for a loan.  
3. Amounts outstanding at the  
effective date borrowed from a person  
who has an interest in the activity other  
than as a creditor or who is related  
under section 465(b)(3)(C) to a person  
(except you) having such an interest.  
This does not apply to amounts  
If you took a deduction for  
percentage depletion for an  
!
CAUTION  
item of depletable property in  
excess of the adjusted basis of the  
property in a year for which you had a  
loss for the activity, subtract the amount  
of the excess from the loss for that year.  
borrowed by a corporation from a  
person whose only interest in the  
activity is as a shareholder of the  
corporation. Enter these amounts only if  
they were included on line 11 and not  
included under (1) or (2) above. This  
applies only to activities described in (1)  
through (5) under At-Risk Activities,  
earlier. See Pub. 925 for definitions and  
more details.  
4. If you are not an S corporation  
shareholder, also include liens and  
encumbrances on property you  
contributed to the activity that are  
included on line 11. If you are an S  
corporation shareholder, do not include  
any loans that were assumed by the  
corporation or that were liens or  
encumbrances on property you  
contributed to the corporation if the  
Do not enter the net FMV if (a) the  
nonrecourse loan was from a person  
who has an interest in the activity other  
than as a creditor or who is related  
under section 465(b)(3)(C) to a person  
(except you) having such an interest,  
and (b) the activity is described in (1)  
through (5) under At-Risk Activities,  
earlier. However, (a) does not apply to  
amounts borrowed by a corporation  
from a person whose only interest in the  
activity is as a shareholder of the  
Line 14  
Decreases at Effective Date  
Enter your share of amounts such as the  
following.  
1. Nonrecourse loans outstanding at  
the effective date used to finance the  
activity, to acquire property used in the  
activity, or to acquire your interest in the  
activity, including recourse loans  
changed to nonrecourse loans. Enter  
this amount only if it was included on  
line 11.  
corporation. See Pub. 925 for  
definitions. If the activity is described in  
(6) under At-Risk Activities, earlier, you  
can include these amounts.  
2. Cash, property, or borrowed  
amounts, protected against loss by a  
guarantee, stop-loss agreement, or  
other similar arrangement outstanding  
2. Total losses from years before  
the effective date for which there were  
equal or greater amounts not at risk at  
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corporation took the property subject to  
the debt.  
under section 465(b)(3)(C) to a person  
(except you) having such an interest,  
and (b) the activity is described in (1)  
If you are not an S corporation  
shareholder, enter the total net income  
from the activity since the effective date,  
Line 15  
Amount At Risk  
If you completed Part III of Form 6198  
for the prior tax year, check box b and  
enter the amount from line 19b of the  
prior year form on this line.  
through (5) (or (6) for amounts borrowed taking into account only those years the  
after May 3, 2004) under At-Risk  
activity had net income. For years since  
Activities, earlier. However, (a) does not the effective date that the activity had a  
apply to amounts borrowed by a  
corporation from a person whose only  
interest in the activity is as a  
net loss, see the instructions for line 18,  
item (5), later.  
If you are an S corporation  
shareholder of the corporation. See  
Pub. 925 for definitions.  
shareholder, enter your total net income  
from the activity for profit years since the  
effective date. Income from the activity  
includes gain recognized under section  
357(c) on contributions of property to  
the activity. Include all distributions you  
received from the activity as well as your  
share of the activity's taxable income.  
Do not enter the amount from  
line 10b of the prior year tax  
2. Cash and the adjusted basis of  
other property contributed to the activity  
since the effective date. Adjusted basis  
is the basis that would be used to figure  
the loss if the property was sold  
!
CAUTION  
form. Also, do not include on  
this line any amounts that are not at risk.  
Line 16  
Increases  
If you completed Part III of Form 6198  
for your prior tax year, check box b and  
enter on this line any increases  
described in (1) through (9) below that  
occurred since the end of your prior tax  
year.  
immediately after you contributed it to  
the activity. See Pub. 551 for details.  
5. Gain recognized on the transfer  
or disposition of all or part of the activity  
or of your interest in the activity since  
the effective date.  
6. Amounts you included in income  
since the effective date because your  
amount at risk was less than zero.  
7. All money from outside the  
activity used since the effective date to  
repay loans included on lines 14 and 18.  
If, however, you used your own assets  
to repay a nonrecourse debt and you  
included an amount in Increases,  
earlier, the amounts included as  
If you are an S corporation  
shareholder and you contributed  
property to the corporation subject to a  
liability, including a liability you are  
personally required to repay, then you  
must reduce the total of the adjusted  
basis of all the property you contributed  
by the total of all liabilities the property  
was subject to. This applies whether the  
corporation took the property subject to,  
or assumed, the liabilities.  
If you completed Part III of your prior  
year form, “since effective date” means  
since the end of your prior tax year.  
3. Loans for which you are  
personally liable that were used to  
finance the activity, to acquire property  
used in the activity, or to acquire your  
interest in the activity and qualified  
nonrecourse financing (defined under  
earlier). Do not enter amounts included  
in (2) above.  
4. Total net income from this activity  
since the effective date (excess of all  
items of income received or accrued  
over the allowable deductions). Do not  
enter any amount less than zero. Do not  
include the current year income or  
gains.  
Enter your share of amounts such as  
the following.  
repayments cannot exceed the amount  
by which the balance of the loan at the  
time of repayment exceeds the net FMV  
of property you own (not used in the  
activity) that secures the debt.  
8. Percentage depletion deducted in  
excess of the adjusted basis of the  
depletable property for the activity since  
the effective date. Use the Line 16  
Worksheet to figure this amount. Be  
sure to include the amount for the  
current year.  
1. Net FMV of property you own (not  
used in the activity) that secures  
nonrecourse loans that were acquired  
since the effective date and were used  
to finance the activity, to acquire  
property used in the activity, or to  
acquire your interest in the activity.  
Generally, the net FMV is determined  
when the property is pledged as  
security for the loan.  
Do not enter the net FMV if (a) the  
nonrecourse loan was from a person  
who has an interest in the activity other  
than as a creditor or who is related  
9. If you are an S corporation  
shareholder, enter the loans you made  
Line 16 Worksheet (Item 8)—Figure Percentage Depletion Deducted in  
Excess of  
the Adjusted Basis of Depletable Property  
Keep for Your Records  
(c)  
(d)  
(a)  
Year  
(b)  
Adjusted basis of depletable property before  
any depletion deduction for  
the year  
Excess percentage depletion  
(column (b) minus column (c))  
but not less than zero  
Percentage depletion deduction  
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
-7-  
 
to your S corporation since the effective  
If you are an S corporation  
For loans, enter the amount of  
the loan you incurred, not the  
current balance of the loan.  
date. Do not include notes that you have shareholder and the property is subject  
TIP  
given to the activity that are still  
outstanding.  
to debt that would be included on line 14  
(or on this line except for the fact that  
there are liens or encumbrances on the  
property in the activity), reduce the  
basis of the distributed property by the  
amount of the debt.  
Line 19b  
Amount At Risk  
If the amount on line 19b is zero, you  
may be subject to the recapture rules.  
See Pub. 925.  
Line 18  
Decreases  
If you completed Part III of Form 6198  
for your prior tax year, check box b and  
enter on this line any decreases  
described in (1) through (8) below that  
occurred since the end of your prior tax  
year.  
If you are not an S corporation  
shareholder, reduce the adjusted basis  
of property withdrawn by the amount, at  
the time of withdrawal, of any  
Part IV—Deductible Loss  
Line 21  
Deductible Loss  
If the loss on line 5 is equal to or less  
than the amount on line 20, report the  
items in Part I in full on your return,  
subject to any other limitations such as  
the passive activity and capital loss  
limitations. Follow the instructions for  
your tax return.  
nonrecourse liability to which the  
property is subject.  
Do not include any money from the  
activity used to repay loans described in  
the instructions for line 14 on page 5.  
Include amounts that were withdrawn  
and recontributed. Recontributed  
amounts must also be included on  
line 16.  
If you completed Part III of your prior  
year tax form, “since effective date”  
means since the end of your prior tax  
year.  
Enter your share of amounts such as  
the following.  
Partners and S corporation  
shareholders who recognize gain on  
distributions from the partnership or S  
corporation must include the  
1. Cash, property, or borrowed  
amounts protected against loss by a  
guarantee, stop-loss agreement, or  
other similar arrangement entered into  
since the effective date. Do not include  
items covered by casualty insurance or  
insurance against tort liability. Enter this  
amount only if it was included on line 16.  
See the instructions at the beginning of  
Part III, earlier, for information on  
effective dates.  
If the loss on line 5 is more than the  
amount on line 20, you must limit your  
deductible loss to the amount on  
distributions on line 18. They must also  
take them into account as income from  
the activity on line 16 unless the gain is  
recognized in the current year.  
line 20, subject to any other limitations.  
Examples. (a) If line 5 is a loss of  
$400 and line 20 is $1,000, enter ($400)  
on line 21. (b) If line 5 is a loss of $1,600  
and line 20 is $1,200, enter ($1,200) on  
line 21. (c) If line 5 is a loss of $800 and  
line 20 is zero, enter -0- on line 21.  
4. Recourse loans (and qualified  
nonrecourse financing) changed to  
nonrecourse loans since the effective  
date.  
5. Total losses from this activity  
deducted since the effective date. Take  
into account only those years in which  
you had a net loss. Do not include  
current year losses or deductions. Also,  
do not include losses or deductions you  
could not deduct because of the at-risk  
rules.  
When comparing lines 5 and 20,  
2. Amounts borrowed since the  
effective date from a person who has an  
interest in the activity other than as a  
creditor or who is related under section  
465(b)(3)(C) to a person (except you)  
having such an interest. However, this  
does not apply to (a) amounts borrowed  
by a corporation from a person whose  
only interest in the activity is as a  
shareholder of the corporation, or (b)  
amounts borrowed after May 3, 2004,  
and secured by real property used in the  
activity of holding real property (other  
than mineral property) that, if  
treat the loss on line 5 as a  
positive number only for  
TIP  
purposes of determining the amount to  
enter on line 21.  
If the amount on line 21 is made up of  
only one deduction or loss item, report  
on your return the amount shown on  
line 21, subject to any other limitations.  
Follow the instructions for your tax  
return to determine where to report the  
amount on your return.  
Your prior tax year line 21  
deductible loss reduces your  
!
CAUTION  
at-risk investment as of the  
beginning of your current tax year.  
6. Nonrecourse liabilities of property  
you contributed to the activity since the  
effective date.  
7. Any other at-risk amounts  
included on line 15 that changed to  
amounts that are not at risk since the  
effective date.  
8. If you are an S corporation  
shareholder, do not include any loans  
that were assumed by the corporation or  
that were liens or encumbrances on  
property you contributed to the  
corporation since the effective date if  
the corporation took the property  
subject to the debt.  
nonrecourse, would be qualified  
nonrecourse financing. Enter these  
amounts only if they were included on  
line 16 and not included under (1)  
above. This applies to activities  
If the amount on line 21 is made up of  
more than one deduction or loss item in  
Part I (such as a Schedule C loss and a  
Schedule D loss), a portion of each  
such deduction or loss item is allowed  
(subject to other limitations) for the year.  
Determine this portion by multiplying the  
loss on line 21 by a fraction. Figure the  
fraction by dividing each item of  
described in (1) through (5) (or (6) for  
amounts borrowed after May 3, 2004)  
under At-Risk Activities, earlier. See the  
instructions at the beginning of Part III,  
earlier, for information on effective  
dates.  
deduction or loss from the activity by the  
total loss from the activity on line 5. The  
remaining portion of each deduction or  
loss item from the activity is disallowed  
and must be carried over to next year.  
3. Cash and the adjusted basis of  
other property withdrawn or distributed  
since the effective date. Adjusted basis  
is the basis that would be used to figure  
the loss if the property was sold by the  
activity at the time you withdrew it or it  
was distributed to you.  
Paperwork Reduction Act Notice.  
We ask for the information on this form  
to carry out the Internal Revenue laws of  
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the United States. You are required to  
give us the information. We need it to  
ensure that you are complying with  
these laws and to allow us to figure and  
collect the right amount of tax.  
The time needed to complete and file  
this form will vary depending on  
If you have comments concerning the  
accuracy of these time estimates or  
individual circumstances. The estimated suggestions for making this form  
burden for individual taxpayers filing this simpler, we would be happy to hear  
form is approved under OMB control  
number 1545-0074 and is included in  
the estimates shown in the instructions  
for their individual income tax return.  
The estimated burden for all other  
taxpayers who file this form is shown  
below.  
from you. See the instructions for the tax  
return with which this form is filed.  
You are not required to provide the  
information requested on a form that is  
subject to the Paperwork Reduction Act  
unless the form displays a valid OMB  
control number. Books or records  
relating to a form or its instructions must  
be retained as long as their contents  
may become material in the  
Recordkeeping. . . . . . . 1 hr., 12 min.  
Learning about the law  
administration of any Internal Revenue  
law. Generally, tax returns and return  
information are confidential, as required  
by section 6103.  
or the form . . . . . . . . . .  
1 hr.  
Preparing the form. . . . 1 hr., 25 min.  
Copying, assembling,  
and sending the form  
to the IRS . . . . . . . . . . .  
20 min.  
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