All Forum Posts by: Justin Brin

For single home property fix & flip what is the best source of funding?

Quote from @Justin Brin:

Quote from @Account Closed:

Quote from @Justin Brin:

Quote from @Account Closed:

Generally, losses from passive activity (k1 showing losses from something like a real estate syndication for example) can only offset passive activity. Real estate professional (for this posts sake) simply makes rental activity active, so you can use the losses there to offset other active income. 

To answer your question: Any passive gains you may offset. 

What will be examples of passive gains (not including rental income)?

 stocks sold that were held for more then 12 months is a common one 

Looks like according to this link, stocks capital gain can't offset passive losses.

Here is how the IRS defines Passive activities (IRS Publication 925):

This means that you cannot use passive losses to offset capital gains, portfolio yields, ordinary income or any other form of taxable gains.

It seems like the only kind of sell that you can use the allowed losses are in this case:

As the IRS explains, “generally you may deduct in full any previously disallowed passive activity loss in the year you dispose of your entire interest in the activity.” This means that if you sell your passive activity, you don’t have to treat its losses as passive losses. This applies to both the year in which you sell the activity and all suspended losses from this activity as well. To trigger this exception, you must meet three criteria:

• You must sell your entire interest in the underlying passive activity
• You must trigger a tax event, meaning that you must sell your interest for value in a fully taxable transaction
• And you must sell your interest to an unrelated third party, no family or close affiliates.

Source Link

Quote from @Account Closed:

Quote from @Justin Brin:

Quote from @Account Closed:

Generally, losses from passive activity (k1 showing losses from something like a real estate syndication for example) can only offset passive activity. Real estate professional (for this posts sake) simply makes rental activity active, so you can use the losses there to offset other active income. 

To answer your question: Any passive gains you may offset. 

What will be examples of passive gains (not including rental income)?

 stocks sold that were held for more then 12 months is a common one 

Looks like according to this link, stocks capital gain can't offset passive losses.

Here is how the IRS defines Passive activities (IRS Publication 925):

This means that you cannot use passive losses to offset capital gains, portfolio yields, ordinary income or any other form of taxable gains.

Quote from @Bill B.:

Owning a business you do no work at. (A pizza place for example.)

What about short term capital gains? Does it count as passive income? 
(I’m referring to capital gains not from selling rentals). 

Quote from @Account Closed:

Generally, losses from passive activity (k1 showing losses from something like a real estate syndication for example) can only offset passive activity. Real estate professional (for this posts sake) simply makes rental activity active, so you can use the losses there to offset other active income. 

To answer your question: Any passive gains you may offset. 

What will be examples of passive gains (not including rental income)?

Quote from @Glen Wiley:

You don't deduct income, you deduct expenses from your income.

Generally speaking, losses experienced as part of passive investing (like operating long term residential rentals) can only be deducted from passive income.

If you have losses that high then it is worth your money to hire a CPA to prepare your tax return.

They are paper losses not actual losses in the bank.
What will be an example of passive income that is not real estate rentals.
I'm assuming that capital gain from stocks is not included and can't be used to offset real estate losses even though they are passive income?

I want to also add that I'm assuming I do not qualify as a real estate professional (50%+ of work on real estate and 750+ hours/year) and that the rentals are long term.

What other kind of income can I deduct with Rental Real Estate losses?

If lets say I have $50,000 paper losses from my real estate can I use it to deduct short term capital gain? What about other types of "passive income"?

From local self managing to long distance investments? How was it for you?

I know many investors invest in their local market and manage it themself. Especially there are investors that are pretty handy and can do many repairs themself.

How was it for you to switch into long distance investments and have someone else do all the managements for you?

How was the transition for you?

@Account Closed I think I should ask you for advice. How did you make $5.3M in short time. Can you teach me?