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Screen 6198 - At-Risk Limitations (1040)
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Use the State allocation spreadsheet for UltraTax/1040 multi-state processing for Screen 6198. Enter all multi-state data at the federal level via the State allocation spreadsheet for each unit of a single entity.
With the State allocation spreadsheet, individual allocation percentages and allocated net income amounts, in total, are not required to foot with the federal amount, so individual state's law differences can be conveniently taken into consideration.
note
- The State allocation spreadsheet is only available when the client being processed includes at least one state return.State, if differentfields are also available in Screen 6198 for single-state processing.
- theState, if differentfields for Screen 6198 are only applicable to the following states: Alabama, Arkansas, California, Connecticut, Georgia, Hawaii, Kentucky, Massachusetts, New York, Oklahoma, Oregon, and Wisconsin. Other state returns being processed with the client will be displayed in the State allocation spreadsheet, but the amount fields will not be enabled for data entry.
- Unlike income allocations, at-risk amounts apply to all residency statuses for AL, AR, CA, CT, GA, HI, KY, MA, OK, OR, and WI, and part-year resident and nonresident statuses for NY.
For more information, refer to the Processing multiple-state returns.
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.
State allocation
To access the State allocation spreadsheet, the following conditions must be present in the current client.
- The client being processed must include at least one state return.
- You must be viewing Client Organizer Data Entry or Input Screen Data Entry.
- For Screen 6198 data must exist in theDescriptionfield.
- At least one field must have preparer-entered data present.
When these conditions have been met, access the spreadsheet by clicking the Allocation icon in this screen.
Two methods (percentage or amount) of allocation can be used to allocate federal amounts to the applicable states displayed in the State allocation spreadsheet.
note
Amount fields applicable to one state may not be applicable to another state. Those amount fields that do not apply to a particular state have been disabled (shaded). Amount fields that are not shaded are considered enabled for the applicable state.
- Percentage:Enter a percentage in XXX.XX format in the first field available in the State allocation spreadsheet. Select the state to which this percentage applies from the fieldview. Click the Apply button. The application automatically calculates the amounts attributable to that state and display the amounts in the spreadsheet. The percentage entered for that particular state will appear below the state name for easy reference. If enabled, individual item amounts can be changed (overridden) on the spreadsheet from the amount calculated by the application.
- Amount:In cases where a percentage of the federal amounts do not apply, individual item amounts, if enabled, may be entered in the spreadsheet for the applicable state. Zero (0) is a valid entry and will prevent the state amount from defaulting to the federal calculated amount. If an individual item amount field is left blank, the federal amount, if present, will be used in the state's calculation.
note
- Unlike income allocations, at-risk amounts apply to all residency statuses for AL, AR, CA, CT, GA, HI, KY, MA, MT, OK, OR, and WI, and part-year resident and nonresident statuses for NY.
- Percentage allocation is only available in the State allocation spreadsheet. State amounts, if different, must be entered in theState, if differentfields provided.
The State allocation spreadsheet may be printed in a report format for future reference. Click the Print or Preview button in the lower portion of the spreadsheet. If licensed, you can also print to FileCabinet CS.
Beginning at-risk amount
Amounts in the
Beginning at-risk amount
field transfer to the appropriate lines in Part II or Part III of Form 6198 based on the entry in the Beginning at-risk code
field. The application does not allow amounts less than zero to be entered in this field. If the AMT fields are blank, the application assumes these amounts are zero.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 only.
Since Effective Date or 12/31/
2024
Enter the increase and decrease in at-risk since the effective date for a detailed calculation, or enter the increase or decrease since 12/31/
2024
for the simplified calculation. The application includes amounts entered in Screen K1-5 in the Cash and marketable securities distributions
and Property distribution
fields as decreases in at-risk basis.Guaranteed payments (Force)
Enter the portion, if different than the total amount, of guaranteed payments reported on Schedule K1 that qualifies as at-risk income.
Total losses deducted...
Use this field to enter previously deducted at-risk losses subject to recapture when the amount of the at-risk is less than zero. The application automatically proformas the losses deducted in the prior year to this field. The application determines the activities' at-risk basis by subtracting the amount on Form 6198, line 10a or 19a, whichever is used, from the current-year profit on Form 6198, line 5. The application generates a diagnostic message when the calculation of at-risk basis is less than zero.
When the at-risk basis is negative, the amount that is negative is compared to the difference of the
Total losses deducted in prior years beginning after 1978
field less the amount in the Amounts previously included in gross income
field. The lesser of the difference or negative at-risk basis is reported on Form 1040, Schedule 1, line 8z as Negative At-Risk Recapture.Amounts previously included in gross income
Use this field to enter amounts previously included in gross income due to negative at-risk. The application automatically proformas the amounts previously included in prior years.
State, if different
Enter state amounts if different from the federal amounts.
note
- The State allocation spreadsheet is only available when the client being processed includes at least one state return.State, if differentfields are also available in Screen 6198 for single-state processing.
- theState, if differentfields for Screen 6198 are only applicable to the following states: Alabama, Arkansas, California, Connecticut, Georgia, Hawaii, Kentucky, Massachusetts, New York, Oklahoma, Oregon, and Wisconsin. Other state returns being processed with the client will be displayed in the State allocation spreadsheet, but the amount fields will not be enabled for data entry.
- Unlike income allocations, at-risk amounts apply to all residency statuses for AL, AR, CA, CT, HI, KY, MA, OK, OR, and WI, and part-year resident and nonresident statuses for NY.
For more information, access the input screen help for the appropriate state application by pressing F1 from within a state input screen. Also, refer to Processing multiple-state returns.
Exclude recourse partnership liabilities...
Enter
X
to exclude the increase or decrease of at-risk basis due to recourse partnership liabilities. The application automatically calculates the increase or decrease of at-risk basis by subtracting the Prior year share of liabilities: recourse
field from the Current year share of liabilities: recourse
field in Screen PBasis1.