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form 6198: basis vs at-risk?

This is re an MLP. My 'ending capital account' has gone negative. AIUI, this means my 'amount at risk' is $0, and I need to file 6198. Part 2 of 6198 ("Simplified computation of amount at risk") starts (line 6) with the Adjusted Basis at the start of the year. Lines 7 &

9 then apply what I take to be the usual basis adjustments incurred during the year. But, if the total on line 10 is positive, it carries to line 20, where it's called "Amount at Risk".

In my case (AIUI), basis is substantially higher than the capital account/at-risk, due to nonrecourse liabilities. So, if I do what

6198 appears to call for, I'll end up with a positive value on line 10 (and thus 20), which seems wrong.

If anyone has any thoughts on this, I'd appreciate hearing them. One suggestion I've heard is to just use the 'at-risk' value, instead of basis, on line 6. This would give what I think is the right result, but I have trouble imagining the IRS saying "basis" when they mean "amount at risk".

Thanks.

Reply to
gbeccles
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I have never (that I am aware of) needed to deal with at-risk issues or Form 6198, but I do have some older (2010) H&R Block CE material on this topic, which includes the following discussion of Line 6, which might address your last question, I'm not sure.

"Enter the adjusted basis of the partner?s partnership interest as of the beginning of the tax year. If the partnership has not provided this figure, combine the amount in Item L, Beginning capital account, with the amount of qualified nonrecourse and recourse liabilities in Item K of the 2007 Schedule K-1. If you do not have the liabilities figure from the 2008 Schedule K-1, use the figures from the 2009 Schedule K-1 for the ending 2007 figures, and assume there has been no change in liabilities. Be sure not to include nonrecourse liabilities in the adjusted basis."

Reply to
Mark Bole

That last sentence is what I thnk I need for the numbers to come out right. I have no clue how they arrived at it; but, at this point, I'll just run with it. Thank you.

Reply to
gbeccles

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