Can someone explain to me the difference between recourse debt and non-recourse debt?

what's "qualified non-recourse financing" that's taken into consideration for at-risk purposes?

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Recourse debt you still owe the balance if the sale

of the collateral does not fully pay the loan. Non-recourse you owe nothing if the sale comes up short.

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>>what's "qualified non-recourse financing"<<

At-risk limitations are calculated on Form 6198, and the first page of the instructions clearly explains qualified non-recourse financing.

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For at-risk limitations, recourse debt means that the lender has recourse (can come after you for the unpaid amount). Thus the borrower is obligated to pay, giving him at-risk basis. Nonrecourse debt then menas that you are not personally obligated to pay the debt. So you don't get at-risk basis unless you actually pay the debt. Qualifying nonrecourse debt is usually bank debt secured by real estate.

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