Understanding At Risk Loss Limits - 90 Days to Taxes Day 21 (Taxes 2026)

There are a few different types of loss limitations that you should be aware of with your business. The first type of loss limitation that may apply is the basis limitations on Partnerships and S-Corporations. The second type of loss limitation is the at risk limitation. This limitation is applied before the passive activity limit.

In this video I discuss the at risk limit and how it is calculated. The at risk limitation can be calculated via the simplified method or the complex method. The simplified method requires you to understand your basis, the complex method is the method you can use if you don't understand your basis.

Our 90 Days to Taxes series helps entrepreneurs avoid the most common small business tax mistakes to avoid. From disorganization to clarity, over 90 days you'll discover how your business is taxed and optional tax elections, what taxes and forms you need to file, how your records should be kept, what you can write off and the tax deductions small business owners miss. This video is from our 2026 Taxes series, information is relevant to the 2026 tax season filing for the 2025 tax year.

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Happy Taxes!