at risk for qualified non-recourse financing

[attykss1]

I am a limited member in a commercial real estate LLC that has passive trade or business income from a self storage facility reported in box 1 of my K1, and passive rental real estate income reported in box 2.  The buildings and land covering both activities was refinanced in 2019.  In Section K of the K1, this financing is described as qualified non-recourse the financing.  Under section 465(b)(6), for at risk purposes, this financing must be secured only by real property used in the activity of holding real property but property that is incidental to the activity of holding real property will be disregarded.  My question if whether the self storage facility which the LLC built and secured with the financing is real property used in the activity of holding real property or is incidental and must be disregarded in determining my at risk liability

[M-MTax · Accepted solution]

Probably holding real estate but it'd be better if you directed your question to LLC managers.