At-risk rules for a closely held corporation

Description

Abstract: The at-risk rules may limit the amount of loss that can be deducted from investment in a closely held corporation. The amount of loss a corporation may recognize from an activity is limited to the amount that is at risk for that activity at the close of the tax year. This article explains what assets are included in the amount that’s at risk in an activity. It notes that these rules are not the only ones that may limit tax benefits from losses in a closely held corporation.