Syndication exit strategy to defer depreciation recapture tax.

[Jessica Singh]

I wanted to explore Syndication as a passive investment opportunity with fellow BP members. I am not able to figure out if it is possible to defer the depreciation recapture gains when the syndicate goes the full cycle. I will appreciate getting some perspective if you have exited syndication or invested in one. How to come to terms with the depreciation tax hit at the time syndication sells. 

[Basit Siddiqi]

Everyone is in a different tax situation so it is not the best to see what another person is doing and roll with it. You should check in with your CPA/Accountant.

Investing in another syndication(who will do a cost segregation) will not solve the issue of exiting a syndication with a large gain.

The character of the gain is different -
The new syndication will generate passive income while the syndication you are exiting is generating portfolio income. You may not potentially be able to offset the two.

There are some exceptions such as being able to claim real estate professional...However, never should be made the assumption on this board that you are.