Line 32

You don’t need to complete line 32 if line 7 is more than the total of lines 28 and 30.

At-risk rules.

In most cases, if you have a business loss and amounts invested in the business for which you are not at risk, complete Form 6198 to apply a limitation that may reduce your loss. The at-risk rules generally limit the amount of loss (including loss on the disposition of assets) you can claim to the amount you could actually lose in the business.

Check box 32b if you have amounts invested in this business for which you are not at risk, such as the following.

Nonrecourse loans used to finance the business, to acquire property used in the business, or to acquire the business that are not secured by your own property (other than property used in the business) and which you are not personally responsible to repay. However, there is an exception for certain nonrecourse financing borrowed by you in connection with holding real property. See the Instructions for Form 6198 and Pub. 925 .

Cash, property, or borrowed amounts used in the business (or contributed to the business or used to acquire the business) that are protected against loss by a guarantee, stop-loss agreement, or other similar arrangement (excluding casualty insurance and insurance against tort liability).

Amounts borrowed for use in the business from a person who has an interest in the business other than as a creditor or who is related under section 465(b)(3)(C) to a person (other than you) having such an interest.

Figuring your loss.

Before determining your loss, check box 32a or 32b to indicate whether the loss from your business activity is limited by the at-risk rules. Follow the instructions next that apply to your box 32 activity.