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Updated over 1 year ago on . Most recent reply

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Steffen Vater
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Benefiting from passive loss/cost seg without real-estate professional status

Steffen Vater
Posted

So I just found out that the loss ($9,500) I showed from last year's real estate syndication investment ($25k) was useless on my return due to the fact that the IRS disallows the use of this passive loss if AGI is >$150k. I understand it starts phasing out at AGI of $100k.

This got me to thinking, how do all these real estate investors take advantage of paper losses to defer taxes? ...do they all meet the real-estate professional status (REPS) or is there something for us non-REPS out there?

...it is my understanding this AGI limitation does not apply if it is a business that invests, which leads to the question: If I had made that investment from my LLC instead of personally, could that loss have been used to reduce the business' taxable income?

Would love to speak with an accountant familiar with the matter and enlist some tax planning services or consulting.

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