Drake Tax - 1040: Partner or Shareholder K-1 At-Risk Losses

How to limit a taxpayer's at-risk loss from a K1S or K1P in an individual return

In a 1040 return, if the partnership or S corporation income is subject to the at-risk loss limitations, complete the 6198 At Risk and 6198 At Risk continued tabs on the K1P or K1S screen.

On the 6198 At Risk tab, enter the amount of the basis limitation using either the Simplified Computation or Detailed Computation. View the return and check Form 6198 and Schedule E, page 2 for accuracy. The carryover of the loss beyond the at-risk limitation should appear on the Wks K1S At-Risk, for S corps, or Wks K1P At-Risk, for partnerships.

The software automatically checks the box Check if any amount is not at risk on Schedule E page 2, Part II, line 28, column F when the 6198 tabs on the K1P or K1S screen have been completed.

If you use the E2 screen, rather than a K1P or K1S screen, you have to check the box Some is not at risk, if applicable. The software does not automatically check the at-risk box for the E2 entry, even if you complete the 6198screen. The 6198 screen cannot be directed to flow to the E2 screen, only to the C, E, F, or 4835 screens.