Note:

Line 32 doesn’t apply to filers of Form 1040-SS.

All investment is at risk.

If all amounts are at risk in this business, check box 32a. If you answered “Yes” on line G, your loss will not be reduced by the at-risk rules or the passive activity loss rules. See Line 31 , earlier, for how to report your loss.

If you answered “No” on line G, you may need to complete Form 8582 to figure your loss to enter on line 31. See the Instructions for Form 8582 for details.

Some investment is not at risk.

If some investment is not at risk, check box 32b; the at-risk rules apply to your loss. Be sure to attach Form 6198 to your return.

If you answered "Yes" on line G, complete Form 6198 to figure the loss to enter on line 31. The passive activity loss rules do not apply. See Line 31 , earlier, for how to report your loss.

If you answered "No" on line G, the passive activity loss rules may apply. First, complete Form 6198 to figure the amount of your profit or (loss) for the at-risk activity, which may include amounts reported on other forms and schedules, and the at-risk amount for the activity. Follow the Instructions for Form 6198 to determine how much of your Schedule C loss will be allowed. After you figure the amount of your loss that is allowed under the at-risk rules, you may need to complete Form 8582 to figure the passive activity loss to enter on line 31. See the Instructions for Form 8582 for details.

If you checked box 32b because some investment is not at risk and you do not attach Form 6198, the processing of your return may be delayed.

At-risk loss deduction.

Any loss from this business not allowed for 2025 only because of the at-risk rules is treated as a deduction allocable to the business in 2026.

More information.

For details, see the Instructions for Form 6198 and Pub. 925 .