Tax Facts

8690 / To what types of investment activities do the “at risk” rules apply?



The “at risk” rules apply to each of the following activities when engaged in by an individual (including partners and S corporation shareholders, see Q 8691) as a trade or business or for the production of income:

(1)  holding, producing, or distributing motion picture films or video tapes;


(2)  farming (including raising, shearing, feeding, caring for, training, or management of animals);


(3)  leasing of depreciable personal property (and certain other “IRC Section 1245” property);


(4)  exploring for, or exploiting, oil and gas reserves;


(5)  exploring, or exploiting, geothermal deposits;


(6)  holding real property.1







1.  IRC §§ 465(c); 464(e).


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