I am getting a Return Note stating that I have not prepared a Form 6198, what is triggering this note?
Return Note 097 reads:
FORM 6198 NOT PREPARED. An entity in the return was marked as not an at-risk investment, but Form 6198, At-Risk Limitations, was not completed.
This note is generated when, in the 1040 package, the Some investment is NOT at risk box is marked on the federal Schedule C, E or F. This check box can be located in the following places:
- Income tab > C Self-Employed Income screen > line 32b,
- Income tab > E Rent/Royalty Income screen > Some investment is NOT at risk check box at the right of the screen, or
- Income tab > F Farm/Co-Op Income screen > line 36b
These check boxes should only be marked if some of the investments are not considered at-risk. If a check box is marked in one of the above locations, a Form 6198, At-Risk Limitations, would also be expected. If a Form 6198 is needed, it can be completed by going to the Income tab > screen 6198, with the For box pointed at the applicable screen.
To determine if any amounts are not considered at-risk, see Publication 925.