As LP in multifamily: depreciation write off preferred returns?

[Stephanie Brown]

Most general partners say that the losses you can show after a cost seg study with multifamily will write all all of your income that you received via preferred returns while that property is being held and paying the limited partners (LPs).

However, my CPA says that preferred returns are dividends and cannot be written off with that depreciation.  The depreciation can be saved until later when the property sells and has capital gains, but that is it.  Who's right?

I have a W-2, classified as high-earner, and no real estate professional status.

[Ashish Acharya]

Stephanie, 

I see GP selling you their investment without understanding the rules.  If the preferred return is coming in as portfolio income, the depreciation cannot shield it.  Sometimes GP will treat the LP's return as a preferred return when it is not. 

The depreciation can offset other passive income if you have them.