Get
Answers

Finding answers to your tax questions is now less taxing.

Browse Tax Articles

H&R Block Tax Professionals relentlessly focus on making sure you profit from every deduction and credit available.

X

At-Risk Limits

You can reduce income reported on your return by deducting allowable losses from either of these:

  • A business
  • Other for-profit activity

The deduction is limited to the money you have at risk in the activity.

The at-risk amount is usually equal to the combined total of these:

  • Money and the adjusted basis of property you contributed to the activity
  • Amounts you borrow for use in the activity, which you’re personally liable to repay
  • Fair market value (FMV) of property you pledged as security for the debt. You can’t count property you contributed to the activity.

The at-risk amount usually doesn't include:

  • Amounts guaranteed against loss through nonrecourse financing
  • Amounts from other loss-limiting arrangements you’re not personally liable for

The at-risk rules apply to:

  • Individuals, including partners and S corporation shareholders
  • Estates and trusts
  • Certain closely held corporations (other than S corporations)

If some of the money you invested isn't at risk, use Form 6198 to figure your allowable loss.

If you'd like to learn more, see Publication 925: Passive Activity and At-Risk Rules at www.irs.gov.

Look At Your Life Through Taxes

H&R Block Tax Professionals relentlessly focus on making sure you profit from every deduction and credit available.

Calculate Your Refund

H&R Block Tax Professionals relentlessly focus on making sure you profit from every deduction and credit available.

Get Answers To Your Tax Questions

H&R Block Tax Professionals relentlessly focus on making sure you profit from every deduction and credit available.

Read Our Blog

The latest news from the pros at H&R Block.

Take A Look
Read our blog

H&R Block Community

Looking at life through tax, join the conversation.

See More

Tax Videos

Visit our Youtube channel.

Watch Now