Instructions For Form 6198 - At-Risk Limitations

that is allocable to the at-risk activity

See Pub. 925 for definitions. If the

1. Nonrecourse loans outstanding

on line 11.

activity is described in 6 under

at the effective date used to finance

At-Risk Activities on page 1, you

the activity, to acquire property used

Line 12

can include these amounts.

in the activity, or to acquire your

interest in the activity, including

2. Total losses from years before

Increases at Effective Date

recourse loans changed to

the effective date for which there

nonrecourse loans. Enter this amount

Enter your share of amounts such as

were equal or greater amounts not at

only if it was included on line 11.

the following.

risk at year end. Use the Line 12

Worksheet and its instructions on

2. Cash, property, or borrowed

1. Net FMV of your own property

page 6 to figure this amount.

amounts, protected against loss by a

(not used in the activity) that secures

guarantee, stop-loss agreement, or

nonrecourse loans used to finance

Make all entries on a year-by-year

other similar arrangement

the activity, to acquire property used

basis. Include amounts only for years

outstanding at the effective date.

in the activity, or to acquire your

before the effective date. Do not

Enter this amount only if it was

interest in the activity that will be

accumulate totals of earlier losses or

included on line 11. Do not include

included on line 14. Generally, the net

nonrecourse debts.

FMV is determined when the property

items covered by casualty insurance

is pledged as security for a loan.

or insurance against tort liability.

If you took a deduction for

3. Amounts outstanding at the

Do not enter the net FMV if (a) the

percentage depletion for an

effective date borrowed from a

nonrecourse loan was from a person

item of depletable property in

CAUTION

person who has an interest in the

who has an interest in the activity

excess of the adjusted basis of the

activity other than as a creditor or

other than as a creditor or who is

property in a year for which you had a

who is related under

related under section 465(b)(3)(C) to

loss for the activity, subtract the

section 465(b)(3)(C) to a person

a person (except you) having such an

amount of the excess from the loss

(except you) having such an interest.

interest and (b) the activity is

for that year.

This does not apply to an interest of a

described in 1 through 5 under

Line 14

shareholder in the case of amounts

At-Risk Activities on page 1.

borrowed by a corporation from the

However, (a) does not apply to an

Decreases at Effective Date

interest of a shareholder in the case

shareholder. Enter these amounts

of amounts borrowed by a

Enter your share of amounts such as

only if they were included on line 11

corporation from the shareholder.

the following.

and not included under 1 or 2 above.

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.)

Cash on hand and in banks for the activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Inventories for the activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3a.

Cost or other basis of depreciable assets for the activity (see

instructions below) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3a.

Accumulated depreciation for the activity . . . . . . . . . . . . . . . . . . . .

3b.

Adjusted basis of depreciable assets for the activity. Subtract line 3b from line 3a . . . . . . . . . . .

5a.

Cost or other basis of depletable assets at the time contributed to the

activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5a.

Accumulated depletion taken on or after property was contributed to

the activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5b.

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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.) . . . . . . . . . . . . . . . . . . . . . . . . .

10a.

Trade notes and accounts receivable for the activity . . . . . . . . . . . . 10a.

Reserve for bad debts for the activity (see instructions below) . . . . . . 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.

Worksheet Instructions

Lines 3a and 3b. See the instructions for line 16, item 2, that begin on page 6 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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