What does "Investment at risk" mean?

[jillcapri]

I was asked several times whether the investments in my businesses are "at risk". I do not understand this question. Does it mean whether I "believe" I will not make a profit from my investments?

[VolvoGirl]

If you don't know what it means then probably All your Investment is at Risk (check Box 32a). It means you are using your own money for the business.

Check Box 32b Not at Risk, if you have amounts invested in this business for which you are not at risk, such as the following:
---Non-recourse loans used to finance the business
---Cash, property or borrowed amounts used in the business that are protected against loss by a guarantee, stop-loss agreement, or other similar arrangement (excluding casualty insurance and insurance against tort liability).
---Amounts borrowed for use in the business from a person who has an interest in the business, other than as a creditor.

If you have money not at risk you can not take a loss on schedule C.

[one-of-three]

At Risk rules can be confusion.

usually this is in relation to an at risk limit.

Basically the money you have in it is at risk. (investment losses money you loose) sometimes there is insurance against losses or the broker may have guaranteed your investment.

If you do not plan to make a profit then you have a hobby and this is not deductible.

What they are looking at if it goes poof what do you loose or is there something else to cover the loss.