Business & farm

Form 6198 reports gains and losses that are limited by the At-Risk rules. Somewhere in the interview you have indicated that you have a business loss, or loss carryover, that is not fully deductible because some of your investment in the business is "not at risk".

The information may come from self employment (Schedule C), rental or royalty income (Schedule E), K-1 income (Schedule E, page 2), farm income (Schedule F or Form 4835), casualty or theft losses (Form 4684) or sales of business property (Form 4797).

At risk is a test that the IRS uses to see if you can deduct losses from investments and businesses that you own.

The basic rule is that you can't deduct a loss from your investment or business if the loss doesn't actually cause you to lose money.

Money you've invested in your business that is not at risk includes:

•  Nonrecourse loans; that is, financing for which you're not personally liable.
•  Cash, property, or borrowed amounts protected against loss by a guarantee, a stop-loss agreement, or a similar agreement.
•  Money borrowed from a person who has an interest in the business, other than as a creditor.

If you have self employment income in the return try the following:

1. Open and continue your return.
2. Click on the word Federal from the menu.
3. Click on Income & Expenses.
4. Find Self-Employment Income & Expenses on the list.
5. Click Review on the right.
6. Click Review to the right of your business name.
7. Find Uncommon Situations near the bottom of the list.
8. Click Edit to right.
9. Carefully review your answers to these questions.

If you are using Turbo Tax Desktop, installed on your computer, you can look at Schedule C in Forms mode. Look at line 32b to see if this box is checked.