DawnC
Expert Alumni

Business & farm

Search for Schedule C and use the Jump to Schedule C link.    Click Edit next to your self-employment income source.   Scroll down and click on Edit next to Uncommon Situations.   Uncheck the box next to I have money invested that I am not at risk of losing (protected from loss) ....   That will mark 32A on Schedule C as an at-risk investment.  

 

It's uncommon for Schedule C businesses to not be at risk, but this can happen if the business is funded with non-recourse loans, money, or property protected by a stop-loss agreement or loans from a non-creditor who has an interest in the business. In those cases, the business owner isn't allowed to take a loss on money or property they weren't "at-risk" of losing in the first place.

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