Understanding K-1 loss limitations in ProConnect Tax

The IRS limits losses and deductions from passthrough K-1 activities using three calculations: the basis limitation, at-risk limitation, and passive limitation.

The program applies the limits as follows:

1. Basis limits are applied first.
2. If losses are allowed by the basis limits, at-risk limits (Form 6198) are applied.
3. If losses are allowed by the basis and at-risk limits, the passive limits (Form 8582) are applied for passive activities.

Refer to the instructions for Schedule E for more information about K-1 loss limitations.

Related topics:

• Understanding basis limitations for K-1 losses
• Understanding at-risk limitations for K-1 losses in ProConnect Tax
• Basis Limitation Frequently Asked Questions in ProConnect
• How to generate Form 8582 for an individual return ProConnect