LLC taxes on a Limited partner equity investment?

[Adam L.]

So not sure if this is in the right subforum.

So I and 3 friends created an LLC to invest in a larger RE operation. The big company buys 500+unit apartment complexes and BRRR's them, offering 'shares' as Limited Partners to investors, distributing quarterly distributions.

This is an informal conversation from the big LLC manager:

"The first several years have significant depreciation, which is a non-cash loss and really just shields from tax exposure. It does not mean that the property is losing money. Because of the large depreciation-based losses, you will actually have some passive losses to distribute amongst your partnership. These can be used against other passive gains you may have from other investments. Also, our distributions are treated as return of capital (not return on capital), which means that you aren’t taxed on the cash distributions during the early years of the deal.

To answer your question specifically, if we hold the asset for more than a year before selling, the profits are treated as long-term capital gains. If we sold the property just 6 months after acquiring, then the profits are ordinary income."

So I'm starting to do taxes (TurboTax Business) and trying to create an 1065 so we can file K-1s.

We started LLC Feb 2018 and signed the docs by March.

• Total initial investment = $100k (split 25/25/50 among 3 members)
• Total distributions earned in 2018 = $2,515.63 ($628.91/$628.91/$1257.82)

Is this something I can do in TurboTax or do I need to get a CPA involved?