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Fixed Assets and UltraTax CS 2023 help is now on Help and Support. We're still moving articles, but you can find most content for the 2023 tax year there. Continue using the Help & How-To Center for tax years 2022 and older.

Question

What does UltraTax/1120 do if Form 6198, line 5 shows a current-year loss?

Answer

Per Form 6198 instructions, if line 5 shows a current-year loss, the loss may be limited to the income or gains, if any, included on lines 1, 2, and 3. If lines 1, 2, and 3 include income, gains, and losses, separate the items. The income and gains are fully reportable on the tax return. The losses and deductions are allowable (subject to any other limitation such as the passive activity rules) to the extent of income and gains. To determine the allowable portion of each loss or deduction, UltraTax CS divides each loss or deduction from the activity by the total losses and deductions from the activity on line 5. UltraTax CS then multiplies the total income and gains by this fraction. The At-Risk Limitation Worksheet, Schedule F At-Risk Limitation Worksheet, Farm Rental At-Risk Limitation Worksheet, and Rent and Royalty At-Risk Limitation Worksheet detail the allowable amounts.

Related topics

• 1120-US: Form 6198 - At-risk calculations FAQs
• At-risk activities overview

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