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Screen CA6198 - California At-Risk Limitations (1120)

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Overview

Use this screen to enter at-risk information for farms, farm rentals, rent and royalty properties, and K-1 pass-throughs. It is important that you report any state-related law differences and details in the CA6198 screen. The data entered generates CA Form 6198 and the CA At-Risk Limitation Worksheet for each at-risk entity.
The application combines information entered throughout the return and determines the allowed losses for an activity.
Information entered in the statement attached to the
Detail schedule
in the CAD screen is connected to an activity using the form / schedule and unit number business activity codes. When these codes agree with the CA6198 screen, the application invokes the at-risk calculations, potentially limiting the losses. If the losses from the activity are limited due to at-risk rules, the CA At-Risk Limitation Worksheet details the loss allowed and disallowed. Note that the application may further adjust the passive activity calculation.
note
If any line on CA Form 6198, Part I has an override; enter the allowable loss or carryover in the correct input screen.

General Information

Description
The description entered here is used as the unit description. The description is mandatory.
Unit / Form
These contain information about the business unit activity. The application uses this information to add and coordinate information for the business unit activity. For example, these let the application link information (such as income or loss, sales, credits, and asset detail) for the activity.
Total amount of losses deducted in prior years beginning after 1978
Use this to enter the limit to which the prior losses are recognized as income due to reductions in the amount at-risk to less than zero for this activity. If you leave this blank, the application assumes that there is no limit to the recapture amount. You may enter zero if there is no amount subject to recapture.
Amounts previously added to gross income under the recapture rule
Use this to enter amounts previously added to gross income due to negative at-risk under the recapture rule. The application proformas the amounts previously included in prior years.

Amount At-Risk

Use this section to enter information to complete Part II or Part III of CA Form 6198. Note that you can enter information for both regular and AMT calculations. If the
AMT
 columns are blank, the application assumes that these amounts are zero.
Beginning at-risk code
Enter the beginning at-risk code to determine which calculation the application uses in the determination of the at-risk amount. Enter a code directly or select one from the dropdown.
Beginning at-risk amount
Amounts here transfer to the appropriate lines in Part II or Part III of CA Form 6198 based on the entry for
Beginning at-risk code
.
At Effective Date
Enter the increase and decrease in at-risk at effective date. The application uses these amounts in the Part III detailed at-risk calculation when code
2
 is entered for
Beginning at-risk code
.
Since Effective Date or the end of your prior tax year
Enter the increase and decrease in at-risk since the effective date for a detailed calculation when code
2
 is entered for
Beginning at-risk code
; or enter the increase or decrease since tax year end for the simplified calculation or for the detailed calculation when code
3
 is entered for
Beginning at-risk code
.

Carryover

Use this section to enter carryover information. You can enter information for both regular and AMT calculations in this section.
note
The application treats blank
AMT
carryover boxes as having no AMT carryover. The application doesn’t use the regular carryovers as a default AMT amount. If there's no difference between the regular and AMT carryover, enter the same amount in both the
Regular
 and
AMT carryover
 columns.
Operating
Enter the operating loss disallowed in a prior year due to at-risk limitations.
Short-term capital loss / Short-term capital loss 8.84% (S Corp)
Enter the Schedule D short-term loss that was disallowed in a prior year due to at-risk limitations. The application combines this amount with other at-risk activities from Schedule D short-term losses and reports this information as a single-line item on Schedule D.
Long-term capital loss / Long-term capital loss 8.84% (S Corp)
Enter the Schedule D long-term loss that was disallowed in a prior year due to at-risk limitations. The application combines this amount with other at-risk activities from Schedule D long-term losses and reports this information as a single-line item on Schedule D.
Section 1231 loss
Enter the Schedule D-1, Part I loss that was disallowed in a prior year due to at-risk limitations. The application combines this amount with other at-risk activities from Schedule D-1, Part I losses and reports this information as a single-line item on Schedule D-1, line 2.
Ordinary business loss
Enter the Schedule D-1, Part II loss that was disallowed in a prior year due to at-risk limitations. The application combines this amount with other at-risk activities from Schedule D-1, Part II losses and reports this information as a single-line item on Schedule D-1, line 10.

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