You must work at least 750 hours per year in a qualified RE business.So most people who have high-earning W-2 jobs outside of real estate won't qualify.But the unique thing about RE pro status is that even if you don’t qualify but your spouse does, you can both file jointly and claim the losses from your RE investments to offset your other active income together.It's an incredibly powerful benefit if you do meet the criteria.

So I would caution everyone to make sure the replacement cost for your improvements will realistically cover your actual replacement cost in the event of a total loss.

Brett, managing syndications funded by other people's hard-earned capital is a serious responsibility and not a part-time job. 

The state laws (do not quote me) appear to not let these companies increase rates (or its not easy) to pick up the losses.

They are now selling resulting in a 100% loss for investors. 

I know it's a long shot, but I'm currently having lawyers review the signed subscription documents to see if there's any way to minimize the losses here. 

Our parent company is called Legions Capital, Inc.

No, it would be a total loss.

Capital invested is tied up in Real Estate and we will pull equity to take care of investors.

I would imagine the LLC will have its own EIN, but we will still report the gain/loss as pass-through income on our joint tax return.