Form K-1 and the Passive Loss Rules [Tax Smart Daily 053]

Today we're going to talk about applying passive activity loss rules to Form K-1. Enjoy!
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Let's connect:

[robbykhan]

This is an awesome video and you explained the passive and non-passive loss so well. Thank you.

[jimfranks]

Brandon - Have enjoyed several of your videos in researching the passive real estate investing alternatives. As a retired attorney & banker who financed many large RE investments, I am familiar with the basics. In reading the various operating agreements, PPM, etc., I do not see in any of these where the projected losses are given, this despite the voluminous data provided on the “cash” P&L. Narrative info is provided on the income splits, distributions, etc. with no associated dollars, but again, no projected loss data other than a statement that the investor, if passive, may be entitled to various tax benefits. And, oh, the attorney-provided CYA statement to check with your CPA. Therefore, you can’t with at least some accuracy guesstimate what your K-1 will be. Some sponsors do not even say whether they are doing a cost segregation analysis, much less what that will be. And bonus depreciation, forget any info on that too. So, my question, am I expecting too much information in order to decide on whether to invest or not? Or is there some secret way to get these data another way? I just think an investor needs to know this. Your thoughts, please.

[lettruthprevail]

Hello, my question is where do you include the rollover passive rental losses of previous years?

[FurgE]

Q? Assuming there's a gain (as opposed to a loss in your example), would both partners (passive and non-passive) be subject to SE Tax (box 14)?

[lahawtho]

To add on a question to this situation. If you're the limited partner and not a real estate professional you can still claim these passive losses if you actively participate right? And if you're income is below the threshold and the passive loss is below the threshold right? Thanks!

[johnkenney]

If I am in a real estate partnership that has been going for a few years and I change tax preparers, does the new person need any information for my return as to the partnership besides what is on the K-1 for the current year they're working on?

[jasneskis]

I have high K-1 loss from investment, oil. But only have passive income…SS, pension, rental, interest, house flip gain, investment capital gain income. Are these K-1 losses useless to me? Is there any way these K-1 losses can be used? Can K-1 loss be carried forward? What income can they be used to offset? Will I have to hope and pray oil well produces enough to off set loss and produce income? I do. Please address this issue,

[jagdeepgarewal]

Hi Brandon,
Great video and explanation of K-1 and partners! so helpful. I am preparing a K-1 return for 3 partners of our LLC. Which section of the K-1 does the Depreciation loss go on? I have the routine Net real estate income (Loss) section filled out from the routine operations of the LLC, and this is a loss also as I started LLC in December 2021 when there was no income but start-up and organizational expenses and taxes only. Would you also give me an idea whether California FTB treats MACRS the same as IRS for cost segregation?, and in Form 3885 of California I should put in the same depreciation and real estate income (loss)? I know CA treats Vehicles under 179 differently.
Jag

[mikefeir]

Can passive losses in a partnership be allocated as agreed upon by the partners? For example, if there is one partner who would greatly benefit from passive losses, can all passive losses in the partnership be allocated to that partner? For example, at 6:05, does that have to be 50/50 % split or can it be 100/0 % split of losses?

[phsx]

Do r e companies often show losses for the first few years? Mine is down 5 percent in 3 years

[karlkloster]

Is a K-1's loss eligle to carry-over to future tax years?

[AmRonPaulian]

Great Video and very simple explanation that I could not find in my CPA review course! One last point that your explanation: Will the passive losses reported on K1 netted against the passive gains? Or can we claim the full amount reported on K1 passive losses? Please explain.
Thanks

[menochivo]

4-6-22 Can the loss on a k1 form be rolled forward to future years if the los is quite great, that the full negative amount not be required for that specific year?

[florencemarcelin]

Hello, If we have an LLC (EIN) and we have 6 properties under the LLC, which form I have to use in this case?

[phsx]

So if my K1 is for an investment lasting 4 years and this is year one but it is all passive, do I have to file any thing for my tax return

[pauls]

When can a real estate investment create an NOL?

[hurielcevallos]

Why does non-passive losses seem to be so much more important than passive losses?

[kevinl]

Hi there, if I purchase a short term rental in December and only rent it out on Airbnb once or twice before the end of the year, can I still claim the bonus depreciation and offset W-2 income (if I qualify)? Thanks

[davecisneros]

How does this apply to MASTERWORKS w art LLC OWNERSHIP?

[eeyespytran]

Can K1 loss rollover to the following year?