Instructions For Form 6198 - At-Risk Limitations - 2003 Page 6
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8This applies only to activities
described in 1 through 5 under
Line 16
At-Risk Activities on page 1.
described in 1 through 5 under
However, (a) does not apply to an
At-Risk Activities on page 1. See
Increases
interest of a shareholder in the case
Pub. 925 for definitions and more
If you completed Part III of Form 6198
of amounts borrowed by a
details.
for 2002, check box b and enter on
corporation from the shareholder.
this line any increases described in 1
4. If you are not an S corporation
See Pub. 925 for definitions. If the
through 9 below that occurred since
shareholder, also include liens and
activity is described in 6 under
the end of your 2002 tax year.
encumbrances on property you
At-Risk Activities on page 1, you
contributed to the activity that are
If you completed Part III of the
can include these amounts.
included on line 11. If you are an S
2002 form, “since effective date”
2. Cash and the adjusted basis of
corporation shareholder, do not
means since the end of your 2002 tax
other property contributed to the
include any loans that were assumed
year.
activity since the effective date.
by the corporation or that were liens
Adjusted basis is the basis that would
Enter your share of amounts such
or encumbrances on property you
be used to figure the loss if the
as the following.
contributed to the corporation if the
property was sold immediately after
1. Net FMV of property you own
corporation took the property subject
you contributed it to the activity. See
(not used in the activity) that secures
to the debt.
Pub. 551 for details.
nonrecourse loans that were acquired
If you are an S corporation
since the effective date and were
shareholder and you contributed
used to finance the activity, to acquire
Line 15
property used in the activity, or to
property to the corporation subject to
acquire your interest in the activity.
a liability, including a liability you are
Amount At Risk
Generally, the net FMV is determined
personally required to repay, then you
If you completed Part III of Form 6198
when the property is pledged as
must reduce the total of the adjusted
for 2002, check box b and enter the
security for the loan.
bases of all the property you
amount from line 19b of the 2002
contributed by the total of all liabilities
Do not enter the net FMV if (a) the
form on this line.
the property was subject to. This
nonrecourse loan was from a person
applies whether the corporation took
who has an interest in the activity
the property subject to, or assumed,
Do not enter the amount from
other than as a creditor or who is
!
the liabilities.
line 10b of the 2002 form.
related under section 465(b)(3)(C) to
3. Loans for which you are
Also, do not include on this
a person (except you) having such an
CAUTION
line any amounts that are not at risk.
interest and (b) the activity is
personally liable that were used to
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)
(b)
(c)
(d)
(e)
(f)
Year
Amount of loss for
Amount not at risk at
Total amounts from
Subtract (d) from (c) Smaller of (b) or (e)
the year
end of year
column (f) for all prior
years
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 1995, 1996, and 2000. At the end of each of those years, John had outstanding amounts not at risk of $1,000. John
had losses of $500 in 1995, $300 in 1996, and $500 in 2000.
For 1995, John enters $500 in column (b), $1,000 in column (c), $1,000 in column (e), and $500 in column (f).
For 1996, 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 2000, 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 2000, 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)).
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