This is the At Risk question- was All or part of your investment at risk? If all amounts are at risk in this business, check Yes, your loss will not be reduced by the at-risk rules or the passive activity loss rules. If some investment is not at risk, the at-risk rules apply to your loss.
In most cases, if you have a business loss and amounts invested in the business for which you are not at risk, you must complete Form 6198 to apply a limitation that may reduce your loss. The at-risk rules generally limit the amount of loss (including loss on the disposition of assets) you can claim to the amount you could actually lose in the business.
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