The at-risk rules generally do not operate to restrict losses from real estate investments as long as they are financed through loans made by commercial banks at market rates of interest.

Question

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The at-risk rules apply to limit the amount of losses that can be deducted in certain types of passive activities, but real estate investments financed through loans made by commercial banks at market rates of interest are generally not subject to these restrictions.

The At-Risk Rules Generally Do Not Operate to Restrict Losses