Form 6198

[bentley]

Considering Schedule E, how do I know whether all my investment is at risk or not, if I have losses on both properties?  I had purchased my property B with the cash that I had borrowed from a bank by refinancing my property A (with cash-out).

[DianeW777]

You determine whether all of your investment is 'at-risk' if you are liable for the repayment of any debt.  If you do not have funds that were borrowed from family or friends for which there is no recourse or debt instrument, then you might have amounts that are NOT considered at-risk.

• An investor's at-risk basis is calculated by combining the amount of the investor's investment in the activity with any amount that the investor has borrowed or is liable for with respect to that particular investment.

[bentley]

Thanks.  Does that mean that if 90% or more of my funds were borrowed from a bank, all of my investment is at-risk, if I have losses from the investment?

[ColeenD3]

Yes. All your investment is at-risk.