taking advantage of passive losses
Tax question. I am not a real estate professional. However, I accumulate a good amount of passive activity losses from rental properties. An opportunity has come along to partner or JV with a company that does a number of house flips. I would be the capital provider and not be active in the partnership. Is there a way to structure the relationship so that I get passive income that offsets my passive losses, thus resulting in no tax owed? Thanks in advance!
#4 Tax, SDIRAs & Cost Segregation Contributor
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#4 Tax, SDIRAs & Cost Segregation Contributor
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Quote from @Ryan Fox:
Tax question. I am not a real estate professional. However, I accumulate a good amount of passive activity losses from rental properties. An opportunity has come along to partner or JV with a company that does a number of house flips. I would be the capital provider and not be active in the partnership. Is there a way to structure the relationship so that I get passive income that offsets my passive losses, thus resulting in no tax owed? Thanks in advance!
Hey Ryan, (in general) your passive income will be offset by these prior passive losses since they carry forward :)
#5 Tax, SDIRAs & Cost Segregation Contributor
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#5 Tax, SDIRAs & Cost Segregation Contributor
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If you structure the deal where you are a non-managing member or limited partner with no say in operations, you will be deemed passive and your income will be passive income.
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#4 Tax, SDIRAs & Cost Segregation Contributor
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#4 Tax, SDIRAs & Cost Segregation Contributor
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Quote from @Zachary Jensen:
Quote from @Ryan Fox:
Tax question. I am not a real estate professional. However, I accumulate a good amount of passive activity losses from rental properties. An opportunity has come along to partner or JV with a company that does a number of house flips. I would be the capital provider and not be active in the partnership. Is there a way to structure the relationship so that I get passive income that offsets my passive losses, thus resulting in no tax owed? Thanks in advance!
Hey Ryan, (in general) your passive income will be offset by these prior passive losses since they carry forward :)
Something i wanted to add to my answer here: These losses carrying forward can offset gains from stocks. I was lucky enough to have a small penny stock I was allocated to hit and used my real estate passive losses to make my gain tax free :) Sometimes we get lucky!