Although I've been listening to the Bigger Pockets podcasts as well as The Money show podcast for a few months, it took me a while and I just recently became a pro member and finally decided to post in the forums. 

Who would bigger pockets pick?

So...can I recoup this $3,600 loss eventually and be positive cash flow on a couple new rental properties (preferably with tenants in place)?

@Juan MontesinoWelcome to Bigger Pockets.

If they persist with their claim, that's when you'll have to make the bigger $ decision.

My name is India Jonassaint, and I am elated to be apart of Bigger Pockets!

And are you looking for lipstick work or bigger reno?

I would take my chances and the belief that the IRS has bigger fish to fry.

Has anyone else noticed that it seems that the people who have the least understanding of money, investing, and profit and loss are bankers???

The Property Management amount is a Guaranteed Payment and is reported on line 4 or line 14 of that specific partner's K-1 with a notation of "A" as the payment type.All other profits and losses for that partner (and any others) get reported on line 2.Do not 1099 the partner.