Depreciation to some partners & not to others in same property.

[Peggy Beauregard]

A syndicator has told me they can give a better return to IRA investors as they don't need depreciation and her accountant does this type K-1 schedule. This would mean the people investing from their personal savings would get a bigger write off and less cashflow the way this is structured.

Other Syndicators get their cost segregation in place and then give a higher cashflow return to the equity partners. 

This sounds the opposite to me. And a confused mind says "NO". I need to be able to explain to potential partners.

As the real estate matchmakers for your financial freedom and a long time real estate investor, I like creativity.  If any CPA could give me the IRS code or supporting information, I would appreciate it.

If this is true, why aren't all the syndicators having their CPAs doing this type of accounting for their equity partners? 

It seems a great disadvantage at the time of sale to the investor who used personal funds as most syndicators do not 1031 to avoid taxes. This means all depreciation must be recaptured.

I thank you. 

[Michael Plaks]

@Peggy Beauregard

Here is why other CPAs are not doing this: it's probably breaking the rules. You cannot treat different partners in a syndication differently without economic substance, just because it gives favorable tax treatment to some partners.

It might be possible to structure things this way if different partners have different level of participation and different risks - which is case by case and high-end as far as tax planning goes. And not always possible.