Another important consideration for individuals is the at-risk rules. At-risk rules intend to prevent the use of tax deductions or in this case tax credits to the extent the taxpayer has no real economic investment at risk.
As they relate to investment tax credits, the at-risk rules limit the use of the credit by reducing the base of investment tax credit property by the amount of any nonqualified nonrecourse financing.
These rules are important to individual taxpayers because the credits can be reduced, denied, or recaptured in later years should the at-risk tests not be met throughout the investment period.