Header
Name(s) shown on return and identifying number.
461
Limitation on Business Losses
- Agency
- IRS
- Revision
- 2025
- Fillable fields
- 18
- Pages
- 1
- Official source
- IRS form page
- Checked
- October 21, 2026
Form 461: Limitation on Business Losses
Form 461, Limitation on Business Losses, is used to figure the excess business loss reported on a noncorporate tax return. The instructions say Code section 461(l) limits the losses from trades or businesses that noncorporate taxpayers can claim each year. An excess business loss can't be deducted in the current year, but it is treated as a net operating loss (NOL) carryover for later years.
The instructions say Form 461 is filed by a noncorporate taxpayer (including a trust subject to tax under section 511) when net losses from all trades or businesses are more than $313,000 ($626,000 for a joint return), or when a loss of more than $156,500 would be reported on any one of lines 1 through 8. It is attached to the tax return, such as Form 1040, 1040-SR, 1040-NR, 1041 or 990-T.
This is the 2025 edition. You can fill out Form 461 free in your browser on this page and download it without an account.
What's on Form 461
Part I, lines 1 to 9
Income and loss items from the return: business income, capital gains, other gains, Schedule E income, farm income and other trade or business items, combined on line 9. Lines 1 and 7 are reserved.
Part II, lines 10 to 12
Income, gain, losses and deductions included in Part I that are not attributable to a trade or business, netted on line 12.
Part III, lines 13 and 14
Line 12 entered with its sign reversed on line 13, then added to line 9 on line 14.
Line 15: threshold
The form says "Enter $313,000 (or $626,000 if married filing jointly)."
Line 16: excess business loss
Lines 14 and 15 added. If less than zero, the amount goes as a positive number on Schedule 1 (Form 1040), line 8p.
How to fill out Form 461
- 1
Leave lines 1 and 7 blank
The instructions say to leave both lines blank. The form marks them reserved for future use.
- 2
Lines 2 to 6
Enter amounts from Schedule 1 (Form 1040), lines 3, 4, 5 and 6, and from Form 1040 or 1040-SR, line 7a. Other returns use the equivalent lines the instructions list.
- 3
Lines 8 and 9
Enter other trade or business income, gain or loss not reported on lines 1 through 7, then combine lines 1 through 8. The result can be positive or negative.
- 4
Lines 10 and 11
Enter the income or gain, then the losses or deductions, from lines 1 through 8 that are not from a trade or business. Line 11 is a positive figure. Capital losses on line 3 are added back on line 11.
- 5
Lines 12 to 15
Subtract line 11 from line 10, reverse the sign on line 13, add lines 9 and 13 on line 14, and enter the threshold on line 15.
- 6
Line 16
Add lines 14 and 15. The instructions say a negative result is the excess business loss, reported as a positive number on the Other income line with "ELA" on the dotted line.
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Where it goes and what happens next
Attach to your return
The form says "Attach to your tax return." It is Attachment Sequence No. 64.
Amended returns
The instructions say to attach Form 461 to any applicable amended returns.
NOL carryover
The instructions say to keep a record of each year's excess business loss because it is treated as an NOL carryover. They point to Form 172.
Ordering rules
The instructions say to apply the at-risk rules first, then the passive activity loss rules, then the excess business loss rules. See Pub. 925.
Other returns
The Other income line is Form 1041, line 8; Form 1041-QFT, Part II, line 4; Form 1041-N, Part II, line 4; or Schedule A (Form 990-T), Part I, line 12 for trusts.
Related forms
172
Net Operating Losses (NOLs)
109 fields, 3 pages
1040
Additional Income and Adjustments to Income
73 fields, 2 pages
1040
U.S. Individual Income Tax Return
199 fields, 2 pages
1041
U.S. Income Tax Return for Estates and Trusts
173 fields, 3 pages
6198
At-Risk Limitations
34 fields, 1 page
1045
Application for Tentative Refund
193 fields, 2 pages
Who files Form 461?
Noncorporate taxpayers attach it to their own return when their business losses pass the thresholds in the instructions. The instructions say to follow their filing rules where they supersede those printed on the form.
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Questions about Form 461
What is an excess business loss?
The instructions define it as the amount by which total deductions from your trades or businesses are more than your total gross income or gains from them, plus the threshold amount.
What is the 2025 threshold?
The instructions say $313,000, or $626,000 for taxpayers filing a joint return, citing Rev. Proc. 2024-40, Sec. 2.32.
Is the excess business loss lost?
The instructions say it can't be deducted in the current year but is treated as a net operating loss carryover for subsequent years.
Where is the line 16 result reported?
As a positive number on the Other income line with "ELA" on the dotted line. On Schedule 1 (Form 1040), the instructions say line 8p.
Do spouses file one Form 461 or two?
One. The instructions say a joint return uses one Form 461 containing all the information for both spouses.
Do capital losses count as business deductions?
The instructions say losses from sales or exchanges of capital assets are not included in the total deductions from your trades or businesses.