Taxes: Adding LPS to your Professional Real Estate Investments

Taxes: Adding LPS to your Professional Real Estate Investments

Property Manager · Pittsburgh, PA · Member since 2013 · 33 posts · 15 votes

Hi,

My question is, can a real estate professional (primary job is managing my own real estate; spend 750 hrs +) with active participation in their own privately held properties ... can that individual ADD to that grouping new holdings in limited partnerships (where they are not the general partner and do not have active participation in the management of the building -- but where diversifying to these holdings is part of their overall investment strategy?) Is this a valid grouping? Would love to hear thoughts/feedback/or recommendation of someone to consult.

Thanks!

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  • Greg O'BrienBusiness Member
    Accountant · Boston, MA · Member since 2019 · 386 posts · 336 votes
    4y

    @Karen F. In certain situations its possible but there are absolutely pros and cons to this!

  • Ashish AcharyaBusiness Member
    CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
    4y

    These rules are complicated. 

    If you are REPS and spend 500hours in your materially participated LTR, you can group and use the losses. 

    No use of grouping the activities  if you don't benefit from the losses. Please talk to your tax advisor.  

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  • Basit SiddiqiBusiness Member
    Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
    3y

    As others have mentoned - Possible but worth having a conversation before doing the new grouping election as it is generally can not be revoked(or extremely difficult).

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