Offsetting Flipping Taxes with Passive Rental Income?

[Dean I.]

So, I have read several books and posts on here concerning offsetting income tax with passive loses or depreciation from rental properties, but I am still a little unclear as to how that all works and if I can actually use use rental property losses or depreciation to offset my house flipping taxes. 

Disclaimer: I am going to speak with an accountant and get some tax planning advice in April (soonest I can get an appointment), but in the mean time, I would like to start looking for rental properties now if it would benefit me this year.

More Info: Currently, I have a business that brings me about 100k income. It is set up as an LLC, elected as a S Corp. Currently, my salary is 30k and the rest is distributed in owner draws. This year, I expect to flip at least 10 houses if not more under another LLC, elected as an S Corp. Currently, I am on flip number 4 and it's March. From each of these houses, I should make between 15k to 20k. I tell you all this because I have read that there are certain stipulations on income level when it comes to offsetting your income tax.

By nature, my understanding is that flipping houses is considered active income, however, I don't do any of the work and I don't manage the projects. The most I do is look at the properties, put in offers, sign contracts and visit the job sites to make sure everything is running smoothly. Point is, I don't think I will even put in 500 hours into flipping houses this year, which I believe is one of the conditions for active income. The reason why I bring up this point is because I have read that in certain circumstances, you can only apply passive loses or depreciation towards passive income and not active income. Again, I am getting some conflicting information here, so I still don't quite understand how that works. So, if I am putting in less than 500 hours per year into flipping houses, can it be considered passive income? Also, If I were to buy rental properties, I would not be managing them myself, so the income from rental properties should also be passive.

So in a nutshell, can I offset my income taxes from both of my LLCs, by using rental property depreciation or losses from a different LLC? If so, how and what conditions have to be met?