If Schedule E (Form 1040), 'AnyAmountIsNotAtRiskInd' checkbox is checked, and the corresponding 'NonpassiveLossAmt' has a non-zero value, then Form 6198 must be present in the return.
IRS Reject Code SE-F-1040-001-02 occurs when the check box on Schedule E has a loss and line 28(f) indicates that any amount is not at risk. When this box is checked, Form 6198, At-Risk Limitations must be completed to determine the allowable loss, if any, under the limitations for passive activity.
On the other hand, if this box should not be checked, i.e., all investment in the partnership or S corporation is at risk, uncheck box 28(f) on Schedule E.
In the individual income tax return in TaxSlayer ProWeb, to indicate that all of the taxpayer's investment in a partnership or S corporation is at risk, from the Federal Section of the return select:
- Income
- Other Income
- K-1 Earnings
-
Schedule K-1 Form 1065 or
Schedule K-1 Form 1120-S - Entity Information - Check the box All Investment is At-Risk.
Additional Information: