AT Risk or Not at Risk

WFB · ‎April 3, 2020

I invest in Energy Transfer Partners LP . Is my investment At Risk or Not At Risk for income tax purposes ?

HelenC12 · ‎April 3, 2020

Yes, you are 'at risk' if you could lose your money and/or property that you put into a business (Limited Partnership).

Amounts not at risk include nonrecourse financing, or guarantees or agreements that limit the losses of the taxpayer.

Additional info: IRS Form 6198 At-Risk Limitations

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

HelenC12 · ‎April 3, 2020

Yes, you are 'at risk' if you could lose your money and/or property that you put into a business (Limited Partnership).

Amounts not at risk include nonrecourse financing, or guarantees or agreements that limit the losses of the taxpayer.

Additional info: IRS Form 6198 At-Risk Limitations

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

WFB · ‎April 3, 2020

The only way I invested in Energy Partners Lp is by purchasing what they call units which is like buying common stock in a publicly traded company . Is my investment then still At Risk or then Not At Risk ? I did not buy into Energy Partners LP directly.

LudwigVan_fan · ‎April 3, 2020

In very simplified terms, you are at risk for the amount you invested. Publicly Traded Partnership? Treated as a corporation under IRC Section 7704?

Also, if there is a loss, you may not be able to deduct the loss because of passive activity rules.

Link to Pub 925...At risk limits begin on page 12

https://www.irs.gov/pub/irs-pdf/p925.pdf

**Disclaimer: Effort has been made to offer correct information; but due to the discussion forum limitations, the poster disclaims any legal responsibility for the accuracy of the poster's response**