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Updated over 5 years ago on . Most recent reply
Sheltering k1 gain with rental loss
I am not a real estate professional and my income is highest tax bracket.
I owe a rental that has loss every year. If I invest in a real estate LLC partnership as a limited partner and get k1 income can I balance them out. If I get 1099 income (because I invested in debt of the LLC partnership) can I balance that out as well.
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#5 Tax, SDIRAs & Cost Segregation Contributor
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#5 Tax, SDIRAs & Cost Segregation Contributor
- Accountant
- Atlanta, GA
"If I invest in a real estate LLC partnership as a limited partner and get k1 income can I balance them out."
The rental losses are passive. They can offset passive income should that income come from other rentals or a syndicate.
"If I get 1099 income (because I invested in debt of the LLC partnership) can I balance that out as well."
No. Interest income is portfolio income. Passive losses cannot offset portfolio income.