Using passive losses from syndication (K-1) to offset income from other SFR rentals

Hello,

Can I use bonus depreciation losses from apartment syndication (form K1) to offset income from income-producing single-family rentals? I own 4 SFRs and have an opportunity to invest in a syndication deal with 60% bonus depreciation this year.

Other details: Both I and my wife have W2 jobs and can not take real estate professional deduction.

Thanks

1588

Level 15

Oct 27, 2023 3:21:53 PM

if you do not actively participate in the syndication its passive losses can only offset the amount of net passive income from the SFRs. Any excess would be a carryover to the following year. Review form 8582 where the limitation is calculated. also realized with such a huge deduction in year one it could throw off income in year 2 and beyond.

certain states, if you have a state income tax may not allow the full bonus depreciation regardless of active or non-active prticipation.

Level 13

Oct 27, 2023 4:54:32 PM

Your facts aren't clear, however, if the apartment syndication k-1 is from a publicly traded partnership (PTP), there are special rules for those structures.

Losses from a PTP can only be used against income from that specific PTP.

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Using passive losses from syndication (K-1) to offset income from other SFR rentals