Publication 925: Passive Activity and At-Risk Rules; Introductory Material

This is archived information that pertains only to the 2004 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.

Table of Contents

What's New

Definition of at-risk amounts expanded. The following rules apply to amounts borrowed after May 3, 2004.

You must file Form 6198 if you are engaged in an activity included in (6) under Activities Covered by the At-Risk Rules and you have borrowed certain amounts described in Certain borrowed amounts excluded under At-Risk Amounts in this publication.
You may be considered at risk for certain amounts described in Certain borrowed amounts excluded under At-Risk Amounts secured by real property used in the activity of holding real property (other than mineral property) that, if nonrecourse, would be qualified nonrecourse financing.

Reminder

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Introduction

This publication discusses two sets of rules that may limit the amount of your deductible loss from a trade, business, rental, or other income-producing activity. The first part of the publication discusses the passive activity rules. The second part discusses the at-risk rules. However, when you figure your allowable losses from any activity, you must apply the at-risk rules before the passive activity rules.

Comments and suggestions. We welcome your comments about this publication and your suggestions for future editions.

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Internal Revenue Service
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Useful Items - You may want to see:

Publication

527 Residential Rental Property (Including Rental of Vacation Homes)
541 Partnerships

Form (and Instructions)

4952
Investment Interest Expense Deduction
6198
At-Risk Limitations
8582
Passive Activity Loss Limitations
8582-CR
Passive Activity Credit Limitations
8810
Corporate Passive Activity Loss and Credit Limitations

See How To Get Tax Help near the end of this publication for information about getting these publications and forms.

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