At Risk Rules

It's a tax law that limits the tax deduction you can take for, well, basically sucking at investing. Invest ten grand in a partnership that buys used train cars in Germany and refurbs them to become restaurants. Yeah, it went bankrupt. The partnership raised a million in equity and four million in debt and all of it netted zero...like even the banks didn't get paid.

You can only deduct the amount that you've put in, more or less...you can't add in incremental deductions beyond your contributions. That is, you can only deduct as tax losses from investments, the capital you had "at risk."