All Forum Posts by: Evan Loader

Care to elaborate a bit more as to why? Do you speak from experience on the passive side?

@Jordan Burnett

Your scenario is too complicated or convoluted for me. Speak to a CPA.

It will be nice if I can structure my syndication investments so I can offset passive K-1 gains with passive K-1 losses. We will see how it works out. If I don’t use the losses to offset a gain while I am an LP in a syndication, no big deal. I’ll use em when I can or when I exit from that deal to washout a depreciation recapture for depreciation I never utilized. I am fully aware I’ll owe taxes on gains at some point. My goal is to defer as long as I can.

Your last paragraph is the strategy I use when it comes to investing as an LP. I have invested in 6 syndications since early 2019 and as each rolls over or re-finances I'll re-invest in a new syndication deal. My plan is as the passive gains from older deals start showing up on my K-1 I'll have passive losses from newer deals to offset that gain. In theory those gains could be partially or fully offset indefinitely until I die and then my basis would be stepped up to where the gain wouldn't be owed by my heirs. Of course this assumes the stepped up basis rule is still in effect when I pass. 

In essence I am laddering my syndications, 2 or 3 per year with new money from my W-2 for as long as I can. Eventually, the hope is that it starts snowballing and the syndication ladder is self funding, that deal exits/refis start funding new deals on their own. 

As a passive investor in syndications, they have been a wonderful vehicle for me as I travel often for work, particularly overseas as is the case right now. So it is incredibly difficult for me to directly buy/manage these larger apartments on my own. Leveraging the benefits of passive investing with an experienced sponsor with a track record of solid performance is a win-win. 

I would like to elaborate a bit on the tax benefits. My strategy as a passive syndication investor has been to invest in 1-2 deals per year and ladder them the way CD investors used to do(or maybe still do if they are stubborn and are okay with safely earning 1%). Over a 5 year period I would have 5-10 syndication investments that are in various progress stages(i.e. construction/initial value add, re-finance, stabilization, exit) so a passive loss on one K-1 could offset a gain on another K-1 gain/exit. Since I am a full-time W2 contractor employee, my ability to offset W-2 income with these passive losses is limited. So I have to carry forward passive losses if there is no passive gain. But as each year ticks along, each syndication I invest in amplifies my ability to endlessly offset passive gains with passive losses. If I can keep that going long enough I may well be able to achieve the stepped-up basis at death and not have to pay some of those taxes due.

So far I've established relationships with over a dozen sponsors and am ahead of schedule on my plan.

@Brandon Hall could you shed light on this issue filing a state tax return to preserve a loss for a K-1?

@ Basit Siddiqi  @Michael Plaks

Thank you both, I will reach out to both sponsors and ask whether they have filed composite returns. If they have not, I still would appreciate some documentation that show a requirement to file a state tax return each year to carry forward a loss when I'll use it to offset some gains. I am sure my CPA will continue to fight me if I don't have any documentation to prove this. 

@Basit Siddiqi

I have a CPA and have used one from 2019 forward because I work overseas as a civilian defense contractor, so I need the assistance of a CPA to handle the FEIE as well as the K-1.

I informed him of this and he told me we don’t have to file in GA and KY if there is no income. According to him I do not need to file state returns for those states to preserve my loss carryovers until there is actual profit showing. He says he can keep track of the losses to carry forward from a K-1 until they start showing profit. I won’t use those losses to offset any other income except those K-1 losses.

If he is wrong and I need to file to preserve those losses when I carry them forward do you have any documentation to substantiate that? I don’t want to challenge him unless I know 100% for sure I have to.

I am a limited partner in several syndications in Kentucky, Texas and Georgia. I am a Michigan resident. I receive a K-1 for all 3 for my federal taxes. Will I need to file a Georgia and Kentucky state income tax return for the properties in Kentucky and Georgia those respective states or will my federal and Michigan return be sufficient?

Thanks in advance

Have you heard of Graham Stephan? He is a Youtube personality that obtained his real estate license at 18 and target affluent households in the Hollywood, CA area. He was a millionaire by age 25, started his Youtube channel to share his stories and now makes $250k to $350k per month in ad revenue just making videos in addition to selling real estate. Check out his page, especially his earlier videos to hear his story. He's currently age 30 and worth $6.5 million, mostly from selling real estate and investing those commissions into buying/rehabbing/renting properties he buys at a discount. 

He really is inspiring, and is perfect for someone in your shoes as he started at the same time as you. 

@Greg Dickerson thanks for the info. I will need to finish 2020 to achieve the 2 yrs above $200k as I only exceeded that in 2019. But it’s good to know it is gross income vs adjusted.