Like others have said, you cannot claim the tax losses until the funds are sold and "realized". 

Given the fact that if  there is a gain a future year the prior year loss can offset it, it seems that one would want to file the loss so they can offset that gain.

I can imagine this is a challenging decision to make.My thoughts:When hope is a key component of the plan of action, it is time to cut losses.

In one of our development projects, the City staff asked us to remove 40 units from our concept plan.This wasn’t requested by the City Commission at a formal hearing, it was the opinion of the staff.Our original conce...

It has cost many people including myself a lot of unnecessary money and still is because you deal with the tax portion of opening unnecessary LLCs recommended by supposed professionals. 

If you spend the entire $300k restoring the property, then here is the end result:- deductible casualty loss of $50k- no current tax- the restored property has $0 basis and cannot be depreciated- when it is later sold, the entire sale price is taxableMechanics and reporting are tricky, and I would not recommend to DIY it, especially since my scenario is over-simplified, and your real scenario is likely to involve more gotchas.Thanks so much. 

It's absolutely crucial investors know if they can or cannot use losses. 

Just curious, is there any tax benefit to filing as a regular partnership and issuing k-1s to ourselves that show a loss?

A reserve is unnecessary, but I still keep around $15,000 - $20,000 in my account.The point is, that you should sit down and assess your finances to determine what the worst-case scenario may look like, how much you would need to cover it without impacting your life, and whether you will need to build a reserve.

Maximum impact without unnecessary overspending.6.