Negative at-risk recapture

When and how to recapture part of losses

If the amount at risk in any activity at the end of a tax year is less than zero, you'll need to recapture at least part of your previously allowed losses. To do this, add the lesser of the following to your income from that year's activity:
  • The negative at-risk amount (treated as a positive amount).
  • The total amount of losses deducted in previous tax years beginning after 1978, minus any amounts previously added to your income from that activity under this recapture rule.

Calculate the recapture

Go to the
61981
screen in the activity's folder and fill out
Total losses deducted in prior years beginning after 1978
 and, if needed, the
Amounts previously included in gross income
. This will report the at-risk recapture amount on Form 1040, Schedule 1, line 8.

The calculation

UltraTax CS calculates the at-risk basis by subtracting the amount on Form 6198, line 10a or 19a, from the current-year profit on Form 6198, line 5. When the at-risk basis is negative, the lesser of the difference between the
Total losses deducted in prior years beginning after 1978
and the
Amounts previously included in gross income
or negative at-risk basis is reported on Form 1040, Schedule 1, line 8 as
Negative At-Risk Recapture
.
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