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US Internal Revenue Service: I6198 - 1994
US Internal Revenue Service: I6198 - 1994
US Internal Revenue Service: I6198 - 1994
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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allowed as a deduction under repealed instructions below to figure this amount.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
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)).
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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
Total ©
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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