Also known as: at-risk · atrisk
Written by attorneys — see sources below.
2 senses
A condition authorizing protective measures by a lawyer. It exists when the lawyer reasonably believes a client with diminished capacity faces substantial physical, financial, or other harm and cannot adequately protect personal interests.
The aggregate amount of money, adjusted basis of contributed property, and personally liable borrowed funds that a taxpayer has placed in an activity. Losses from the activity are deductible only to the extent of this amount.
A condition authorizing protective measures by a lawyer. It exists when the lawyer reasonably believes a client with diminished capacity faces substantial physical, financial, or other harm and cannot adequately protect personal interests.
The aggregate amount of money, adjusted basis of contributed property, and personally liable borrowed funds that a taxpayer has placed in an activity. Losses from the activity are deductible only to the extent of this amount.
Adam Anderson contributes cash and property to an oil and gas venture financed partly by nonrecourse borrowing. When the venture generates a large loss, Anderson attempts to deduct the full amount against other income. The deduction is limited to the cash and property he contributed plus any recourse debt for which he is personally liable.
2 common questions
Each sense below has its own examples, sources, and questions.
Angela Acosta, an elderly client, repeatedly misplaces documents and states she cannot track the numbers during negotiations for a franchise agreement. Her nephew, who stands to earn a commission, pressures her to sign quickly. Her lawyer reasonably concludes that Acosta faces substantial financial harm and cannot protect her own interests, so the lawyer contacts a county social worker to explore protective options.
2 common questions
Protective action is permitted when the lawyer reasonably believes the client has diminished capacity, faces substantial harm without intervention, and cannot adequately act in the client's own interest. The lawyer may consult appropriate individuals or entities and, in suitable cases, seek appointment of a guardian or conservator.
Supporting sources
No. When the conditions for protective action are met, the lawyer is impliedly authorized to reveal information to the extent reasonably necessary to protect the client.
Supporting sources
A taxpayer is at risk for cash and adjusted basis of property contributed to the activity plus amounts borrowed for which the taxpayer bears personal liability or has pledged other property as security.
Generally no. Nonrecourse financing is excluded unless it qualifies as qualified nonrecourse financing in the real estate context.