Form 6198 Part 1 Line 2c

[rossconni]

The K-1 we received has a loss of $42,397 in Box 1.  In Box 2 (Net Rental Real Estate Income) the amount is $4,130.  TurboTax requires me to make two separate K-1 entries for this same K-1 form.  When filling out the Form 6198, in order to take a larger portion of the $42k loss of Box 1, can I add the $4,130 to Line 2C , with the Description of From Rental K-1?  There is also Interest Income of $3,942 in Box 4 that appears on the 6198 line 3. There was also a non-deductible expense of $593 that is appearing on line 4.  The Adjusted Basis of the K-1 partner is $21,051.  

My Smart Worksheet Shows

A Line 1 Disallowed Loss $23,644     Allowed Loss -18,753

F Line 4 Disallowed Loss -$331          Allowed Loss --262

H  Income  3,942

I Deductible Loss line 21 -15,073

Am I handling the Rental K-1 income correctly on the 6198?

[AmeliesUncle]

I believe the rental income should be on line 3 of 6198.

But back up a bit ... are you sure that Form 6198 applies to you?  The losses are first limited to your Basis (in your case, $21,051), but if you have At-Risk limits (for amounts Not-At-Risk), that will reduce the allowable losses even further.

https://www.irs.gov/instructions/i6198#idm139991131088368

[rossconni]

I do believe that the 6198 applies.  The partner is a 50% partner and the beginning of year balance sheet equity is twice the $21,051.  

[AmeliesUncle]

It seems like you are talking about Basis, not At-Risk.

[rossconni]

At-risk basis is calculated at the end of every tax year. Partners’ at-risk basis increases when they add additional investments to the business or receive income from the business in excess of deductions. At-risk basis decreases if the amount in deductions exceeds the amount of income received.

[AmeliesUncle]

Yes, but as I said before, it seems like you are talking about 'regular' Basis (you mentioned the equity), not At-Risk Basis.

You may consider going to a tax professional.

[rossconni]

• I do not want to go to a "tax professional" before I have a better understanding of this "at-risk" subject.  I will attempt to get a better understanding of the subject.  If there is anyone else out there that can aid my understanding of the subject, I would appreciate it.