Instructions For Form 6198 - At-Risk Limitations (Page 5 of 8) in pdf

accumulate totals of earlier losses or

3. Amounts outstanding at the

Line 15

effective date borrowed from a person

nonrecourse debts.

who has an interest in the activity other

Amount At Risk

than as a creditor or who is related

If you took a deduction for

If you completed Part III of Form 6198

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

percentage depletion for an item

for the prior tax year, check box b and

(except you) having such an interest.

of depletable property in excess

CAUTION

enter the amount from line 19b of the

This does not apply to amounts

of the adjusted basis of the property in

prior year form on this line.

borrowed by a corporation from a

a year for which you had a loss for the

person whose only interest in the

activity, subtract the amount of the

Do not enter the amount from

activity is as a shareholder of the

excess from the loss for that year.

line 10b of the prior year tax

corporation. Enter these amounts only if

form. Also, do not include on

CAUTION

they were included on line 11 and not

this line any amounts that are not at

Line 14

included under (1) or (2) above. This

risk.

applies only to activities described in (1)

Decreases at Effective Date

through (5) under At-Risk Activities on

Line 16

Enter your share of amounts such as

page 1. See Pub. 925 for definitions

the following.

and more details.

Increases

4. If you are not an S corporation

1. Nonrecourse loans outstanding at

If you completed Part III of Form 6198

shareholder, also include liens and

the effective date used to finance the

for your prior tax year, check box b and

encumbrances on property you

activity, to acquire property used in the

enter on this line any increases

contributed to the activity that are

activity, or to acquire your interest in

described in (1) through (9) below that

included on line 11. If you are an S

the activity, including recourse loans

occurred since the end of your prior tax

corporation shareholder, do not include

changed to nonrecourse loans. Enter

year.

any loans that were assumed by the

this amount only if it was included on

If you completed Part III of your prior

corporation or that were liens or

line 11.

year form, “since effective date” means

encumbrances on property you

2. Cash, property, or borrowed

since the end of your prior tax year.

contributed to the corporation if the

amounts, protected against loss by a

corporation took the property subject to

Enter your share of amounts such as

guarantee, stop-loss agreement, or

the debt.

the following.

other similar arrangement outstanding

at the effective date. Enter this amount

1. Net FMV of property you own

only if it was included on line 11. Do not

(not used in the activity) that secures

include items covered by casualty

nonrecourse loans that were acquired

insurance or insurance against tort

since the effective date and were used

liability.

to finance the activity, to acquire

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.

b. 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), 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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