Using passive losses from syndication (K-1) to offset income from other SFR rentals

Forum|Forum|2 years ago
October 27, 2023
2 replies
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Hello,

Can I use bonus depreciation losses from apartment syndication (form K1) to offset income from income-producing single-family rentals? I own 4 SFRs and have an opportunity to invest in a syndication deal with 60% bonus depreciation this year.

Other details: Both I and my wife have W2 jobs and can not take real estate professional deduction.

Thanks

Not A Product Question

Mike9241

if you do not actively participate in the syndication its passive losses can only offset the amount of net passive income from the SFRs. Any excess would be a carryover to the following year. Review form 8582 where the limitation is calculated. also realized with such a huge deduction in year one it could throw off income in year 2 and beyond.

certain states, if you have a state income tax may not allow the full bonus depreciation regardless of active or non-active prticipation.

Rick19744

Employee

Your facts aren't clear, however, if the apartment syndication k-1 is from a publicly traded partnership (PTP), there are special rules for those structures.

Losses from a PTP can only be used against income from that specific PTP.

*A reminder that posts in a forum such as this do not constitute tax advice.Also keep in mind the date of replies, as tax law changes.