Form 4797, basis, passive activity, and at-risk adjustments
When you report a loss from a disposition in a K-1 activity on either line 2 or line 10 of Form 4797, there may also be an adjustment that negates the loss reported on the same line. This adjustment can be labeled as a
Basis Adjustment
, an At-Risk Adjustment
, or a Passive Activity Adjustment
.To change or eliminate the adjustment, make an entry in the K-1 activity for the type of adjustment.
- For aBasis Adjustment, review the data entry on the PBasis or SBasis screens and theBasisworksheets.
- For anAt-Risk Adjustment, review the data entry on the 6198 and 6198-2 screens, and Form 6198.
- For aPassive Activity Adjustment, review the Passive Activity Code selected on the K1-2 screen nd Form 8582.
Form 4797 may have an
At-Risk Adjustment
because of a disposition in a rental unit. For this adjustment, review the 6198 and 6198-2 screens, and Form 6198 in the rental unit.
