Interactive figure / Partnership loss limitations

A loss must pass more than one gate.

Follow one hypothetical allocated loss through outside basis, at-risk, and passive-activity limits. Keep the stopped portions separate.

This is an ordering illustration for an individual partner with one ordinary loss and no other competing loss items. You supply independently determined capacities and classification. It does not compute eligibility, outside basis, at-risk amounts, or passive income.

Build a hypothetical example

Allocated ordinary loss ($)

Enter a positive loss magnitude, after any applicable partnership-level limits. No prior-year suspended losses are included.

Outside basis available for this loss ($)

Assume required pre-loss adjustments are already made and this capacity is available for this one loss. A capital-account balance is not a substitute.

At-risk amount available for this loss ($)

An independently computed amount. Debt included in outside basis does not necessarily create the same at-risk amount.

Assumed activity classification

A pass-through business loss is not automatically passive. Material participation, rental exceptions, and other classification rules must be resolved separately.

Passive income usable by this loss ($)

Already determined after grouping, separate-activity restrictions, and other competing passive losses. Not wages, portfolio income, or an assumed special allowance.

Changing one input does not recompute any other input. Real contributions, debt changes, income, and distributions can affect several capacities at once.

Allocated loss entering the illustration$100,000

01 / §704(d)

Outside basis

Loss reaching this gate: $100,000

Assumed available capacity: $80,000

Passes onward$80,000

Held at this gate$20,000

02 / §465

Amount at risk

Loss reaching this gate: $80,000

Assumed available capacity: $50,000

Passes onward$50,000

Held at this gate$30,000

03 / §469

Passive activity

Loss reaching this gate: $50,000

Assumed available capacity: $10,000

Passes onward$10,000

Held at this gate$40,000

Passed these three gates$10,000

This is not a final deductible-loss amount. Other limitations still need their own analysis.

Three distinct suspended portions

The amounts below partition this one hypothetical loss. They are separate records with different release conditions, not one interchangeable carryforward balance. Increasing one capacity does not release amounts stopped at another gate.

§704(d)

Basis-suspended portion

$20,000

§465

At-risk-suspended portion

$30,000

§469

Passive-suspended portion

$40,000

Reconcile the original loss
Destination	Amount
§704(d) · Basis-suspended portion	$20,000
§465 · At-risk-suspended portion	$30,000
§469 · Passive-suspended portion	$40,000
Passed the modeled gates	$10,000
Total = original allocated loss	$100,000

Show each calculation

§704(d): min($100,000, $80,000) = $80,000
Held here: $100,000 − $80,000 = $20,000
§465: min($80,000, $50,000) = $50,000
Held here: $80,000 − $50,000 = $30,000
§469: min($50,000, $10,000) = $10,000
Held here: $50,000 − $10,000 = $40,000
$20,000 + $30,000 + $40,000 + $10,000 = $100,000

Passing one gate does not satisfy the next

The sequence is basis → at-risk → passive activity. Amounts stopped by basis or at-risk limits do not also enter this year’s passive-loss bucket. This example isolates one loss; multiple tax-character items and multiple activities can require allocation rather than a single shared ceiling.

Basis and economic exposure are different measures. Some nonrecourse debt can contribute to outside basis without being at risk; qualified nonrecourse financing and other exceptions need separate analysis. A K-1 ordinary business loss also does not establish passive status. This tool accepts those conclusions as assumptions.

Excluded: release of earlier suspended losses, material-participation tests, rental real-estate allowances, disposition releases, publicly traded partnership rules, grouping determinations, allocation among competing items, at-risk recapture, §163(j) business-interest limits, §461(l) excess business losses, capital-loss rules, tax rates, and state law. A final passed amount is not a tax deduction recommendation or a return-ready amount.

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Reviewed November 15, 2026. All numbers remain on this page; no inputs are sent or saved.