Form 6198

[DTS]

I am needing to fill out two of this form this weekend. I am having a devil of a time understanding most of the form so I can fill it out. I understand the reason for the form, but instructions leave most of it to my imagination. IRS told me it was beyond their scope! So, here I am.

If I give the situation for '05 and '06, would someone be kind enough or have a little spare time fill out a template so I can fill it out? If this is OK, I'll check the board later this afternoon and leave you a private message with my fax and/or phone.

Keeping my fingers crossed!

Dennis

[DTS]

6198

I don't think this is as drastic as I thought this morning. Maybe, a little clarification on a few lines should help me greatly. I'm not sure whether to use Part ll or lll.

Part l & ll I'm OK with. Part lll I'm unsure of, as I don't know what they are referring to as the "effective date". What is this? Is this for fiscal filers?

Probably will stay with Part ll, but instructions say Part lll will allow a larger amount at risk.

Thank you,

Dennis

[Bees Knees]

Effective dates have to do with various types of activities and the dates they first became subject to the at-risk rules. For example, if you produce motion pictures, your effective date is the first day of the first tax year beginning after 1975. If you are exploring for or exploiting geothermal deposits, your effective date is usually October 1, 1978, for wells started after September 30, 1978. The activity of holding real property is subject to the at-risk rules for property placed in services after 1986.

The reason you might receive a larger at-risk basis using part lll is you get your basis attributed to periods prior to these effective dates regardless of whether or not you were at risk prior to these dates. All activity after these effective dates are subject to at-risk rules.

[DTS]

Dates

Bees,

Thank you for explaining this.

Please, one last follow-up: In a C-corp when one s/h owns more than 50% of the stock, a 6198 is required to be filled out. I am assuming this has to be filed with the 1120 or should it only be filed with the 1040 of the s/h? My understanding is the 1120.

Thanks, again.

Dennis

[Bees Knees]

The 1120.

The shareholder of a C corp does not deduct C corp losses, therefore, no need to do a 6198 on the shareholder's return.