K-1 Partnership Tax Question

[Kevin Barry]

My wife and I own an LLC (Partnership) that has invested in Open Door Capital. Our partnership just received our K-1 for 2023. I realize that our partnership would need to file our 1065 for 2023, but would then the partnership issue subsequent K-1s to me and my wife, to which we would include when we file our personal taxes? Not exactly sure how this would work to make sure we are taking advantage of the loss reported for our own personal taxes.

[Michael Plaks]

Quote from @Kevin Barry:

 Not exactly sure how this would work to make sure we are taking advantage of the loss reported for our own personal taxes.

Good news:
Your understanding of the process is correct. Let's say that the K1 from ODC says $40,000 loss. You file your own partnership return that reports this $40k loss, which will result in two K1s from your partnership: $20k K1 loss to you and $20k K1 loss to your wife (assuming 50/50 ownership). On your personal joint return you have 2 x $20k = $40k loss.

Bad news:
You may not be able to apply your $40k loss to your income in the current year. It depends on your tax situation, and here's a detailed explanation:  
https://www.biggerpockets.com/forums/51-tax-legal-issues-con...