1040-US: Investment interest expense limitation (Form 4952) and at-risk limitation (Form 6198)

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Question

Does the at-risk limitation come before investment interest limitation?

Answer

No. The IRS requires limitation by Form 4952 first, then limitation by Form 6198. Enter investment interest limited by Form 4952 in the Investment interest expense - Schedule A field in Screen K1-3. The tax application reports this limited amount on Schedule A.

Note: Amounts in the Investment interest expense - Schedule E field transfer directly to Schedule E and are not limited on Form 4952.

Related topic: Form 6198 - At-risk calculations FAQs (1040)

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