Regards,namal You could also "match" the income of passive loss with loss from passive loss, either from repair of any other property or from early year's syndication project, so you basically collect PAL, aggregate it , and when you have final disposition of one hous capital gain, that capital gain could use the offset of aggregated PAL.

@Jordan Hamilton Typicaly the sponsor earns some money to cover their costs and some of their time by charging fees - acquisition fee, asset mgmt fee, construction mgmt fee, and fees for handling any refinance and disposition.  

Some family offices are sophisticated real estate operators themselves and they have an entire staff in-house sourcing acquisitions and running point on operations and dispositions. 

If the assets become an issue of dormant accounts and assets, the state may be involved as such assets usually revert to the state for disposition, at a cost I'm sure.

@Michael Magnell  If you haven't done a cost segregation study or a partial asset disposition (PAD), it could give you $18k to $30k in extra cash-flow now.

on sale activity definitely YES as sale is "final disposition".

Disposition (Owner Finance): Sale Price: $210,000 Down Payment (10%): $21,000Mortgage: 30 year fully amortizing 8% fixedMortgage Payment (PITI, including solar, and AC): $221Now at the end of the day our investment in the deal would be $23,500 and we would cash flow about $615 a month.

They can get an acquisition fee, management fee along the way and a disposition fee as well.

You may be able to elect to treat the improvement as a partial disposition and scrub the depreciation schedule of the previously capitalized asset.

Then the developer may test several possible splits of the final disposition to see is there is a stucture where the equity investors can get an adequate IRR and the developer can also get a reasonable "promote" over and above the fee income.