Under the at risk rule, how is an individual's "amount at risk" determined?
Losses disallowed because of the at risk rule may be carried forward indefinitely and deducted in future years to the extent that the activity produces net income for that year, or to the extent the taxpayer's amount at risk has been increased by additional contributions, etc.
Furthermore, items of deduction described in (4), that are disallowed by reason of the at risk rule must be further subdivided according to the tax year in which they were originally paid or accrued; when such deductions are eventually allowed, those deductions paid or accrued earliest will be allowed first.
Furthermore, should one of the taxpayer's limited partnerships be engaged in more than one activity covered by the at risk rule (e.
The at risk rule and the limitations it imposes on the deduction of losses does not affect the tax basis of property involved in the covered activity (including the tax basis of a limited interest in a partnership engaged in the covered activity) for purposes of determining gain or loss on disposition, calculating depreciation or depletion, or any other purpose.
A passive loss that would not be allowed because of the basis limitations or the at risk rule is suspended and carried forward under the basis and/or at risk provisions, not the passive loss rule.
According to the Senate Finance Committee Report, TRA '86, amounts at risk are reduced even if deductions that would be allowed under the at risk rule are suspended under the passive loss rule.
5) Apparently, if a publicly traded partnership is taxed as a corporation (see Q 1189), the partnership is not subject to the at risk rules
unless it is closely-held (generally, more than 50% control by five or fewer owners).