Purpose of Form
Use Form 6198 to figure:
• The profit (loss) from an at-risk activity for the current year (Part I).
• The amount at risk for the current year (Part II or Part III).
• The deductible loss for the current year (Part IV).
The at-risk rules of section 465 limit the amount of the loss you can deduct to the amount at risk.
Who Must File
Form 6198 is filed by individuals (including filers of Schedules C, E, and F (Form 1040)), estates, trusts, and certain closely held C corporations described in section 465(a)(1)(B), as modified by section 465(a)(3).
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 amounts not at risk (see Amounts Not at Risk later) invested in an at-risk activity (defined below) that incurred a loss.
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 borrowed amounts described in (3) under Amounts Not at Risk (see Amounts Not at Risk later).
Form 6198 At-Risk Limitations