at-risk vs passive loss the at-risk limitation is a limit of deduction to the amount invested or at risk. it also includes recourse debt and some qualified nonrecourse debt related in real estate. the amount may be carried forward until the at-risk limit is increased. at-risk limitation is used first to all applicable activities before using the passive loss limitation. the passive loss limitation is to disalllow the deduction of passive losses against active and portfolio incomes. passive losses are losses from an activity where a taxpayer does not materially participate and certain rental activities.

wow... i understand corporate tax better.
  ¶ 7:19 AM