At-risk or not (at-risk) carryovers

Forum|Forum|2 years ago
October 7, 2023
2 replies
27 views

Hello,

I see in my 2021 (form 8995) a "qualified business loss carryforward" (about $5K) that needs to be transferred to 2022.

Now, in this year's tax return I see two options when I go through the menu:

so I would like to now what is considered "at-risk loss." I googled it but it didn't seem super clear to me if it would apply to me.

Thanks.

Anonymous_

Level 15

I will page @Mike9241

Mike9241

Level 15

if you used Turbotax in the prior year any carryovers should transfer when you start 2022. click start new return in Turbotax and it will look for the xxxx.tax2021 file to transfer the data.

if you didn't use Turbotax then:

I see in my 2021 (form 8995) a "qualified business loss carryforward" (about $5K) that needs to be transferred to 2022.

a QBI loss carryforward is different from at-risk carryover. it would get entered on the form that created the loss it could be a k-1, schedule E schedule C or any other form where business income is reported. look at the 8895 because the name of the entity should be listed.

so I would like to now what is considered "at-risk loss." I googled it but it didn't seem super clear to me if it would apply to me.

at--risk is a complicated subject. the usual reason not to be at risk is to not have sufficient tax basis to take the loss. another reason, somewhat over simplified, you put in $5000 into the venture but someone is obligated to cover your losses in excess of $2500 dollars this could be current or in the future. your at-risk amount is only $2500

IRC 465 and the related regs cover at-risk

a simpler discussion is on the instructions to form 6198

Mike9241

lameriAuthor

Level 5

Thank you very much for your response. I used TurboTax last year, but there was a bug that resulted in me having to amend 3 returns, pretty crazy! So I got the help and mainly the problem was the carryovers/carryforwards, so I get nightmares from the term... I spent about 15 hours on the phone with the TurboTax CPA and several redoes because things were not fine. At the end, I do have the file that I ended up filing, but no, it didn't transfer to this year's return, at least not the QBI for the not at-risk part.

Meaning: the TurboTax CPA told me that the $5K that I see as carryforward in 2021's Form 8995 (Qualified Business Income Deduction) is my carryforward for 2022, but I do not see doing that for me, so I just put it myself in QBI section in here: