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Filling out Schedule K-1 Form 1065; trying to decide if investment is at risk or not.

Forum|Forum|7 years ago
June 6, 2019
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Am listed as a limited partner. Family trust, no personal money put into partnership. Is my investment is "at risk" given that there was no monetary investment?

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Best answer by MichaelL1

The purpose of the at-risk rules is to prevent you from claiming a loss in excess of what you actually stand to lose.

Only the amount you are personally at risk of losing counts towards your at-risk basis, which is also called your tax basis.

How did you get the interest in the Family trust? Most investments in 1065 are through a contribution (can be cash or property), and generally you are at risk for that initial investment.

MichaelL1Answer

Employee

The purpose of the at-risk rules is to prevent you from claiming a loss in excess of what you actually stand to lose.

Only the amount you are personally at risk of losing counts towards your at-risk basis, which is also called your tax basis.

How did you get the interest in the Family trust? Most investments in 1065 are through a contribution (can be cash or property), and generally you are at risk for that initial investment.