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Entering Form 6198, At-Risk Limitations in a 1041 fiduciary return in ProConnect Tax

by ProConnect Tax Online Updated 7 months ago

Form 6198 isn't currently supported in the fiduciary return, and must be completed manually. Once you've completed Form 6198, the amounts can be manually entered, however, the return will no longer be eligible for e-file and will generate the following critical e-file diagnostic:

  • K-1 Information #X:  Form 6198 is not supported by the program.  This return must be filed as a paper return. (ref. #39391)

To manually enter the at-risk limitation in Form 1041

For a Schedule E rental:

  1. Go to Input Return Income Rental & Royalty Inc. (Sch E)
  2. Locate the field Amount at risk (blank=all).
  3. Enter the total amount at risk in this property as a positive number.
    • If this Schedule E has a loss, the loss is limited to the amount entered here. You'll need to prepare and attach Form 6198 manually for amounts which aren't at risk. ProConnect Tax will assume the entire loss is at risk when this field is left blank.
    • If the activity is passive, the prior year unallowed losses flow to Form 8582 and worksheets. To suppress this calculation enter -2.

For a Passthrough K-1:

  1. Go to Input Return Income Passthrough K-1's.
  2. Scroll to the General Information section.
  3. Locate the field Amount at risk (blank=all).
  4. Enter the total amount at risk in this K-1 entity as a positive number. If this Schedule K-1 has a loss, ProConnect Tax limits the loss to the amount entered here. You'll need to manually prepare and attach Form 6198 if you have amounts which aren't at risk. If this field is left blank, ProConnect Tax will assume the entire amount is at risk.
    • Any entry here only applies to ordinary income/loss. You must manually adjust the at-risk amount for any other items that would affect the at-risk amount.
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