Schedule K-1 (Form 1065) - Loss Limitations

While the at-risk limitations is calculated on IRS Form 6198 and the passive activity limitations is calculated on IRS Form 8582, there is not an IRS form for the potential limitations on the amount of partnership losses that you may deduct based on your basis in the partnership. You would need to enter only the loss allowed on Line 1 of the Schedule K-1, and then manually track the basis and also the amount not allowed in the current year which could be carried forward to the time when the basis in the partnership allows the loss to be taken.

Additional Information

IRS Partner's Instructions for Schedule K-1 (Form 1065), page 2:

Limitations on Losses, Deductions and Credits

There are potential limitations on partnership losses that you can deduct on your return. These limitations and the order in which you must apply them are as follows:

  1. The basis limitations
  2. The at-risk limitations (calculated on Federal Form 6198)
  3. The passive activity limitations (calculated on Federal Form 8582)
  4. The excess business loss limitations

Each of these limitations is discussed separately in the instructions.