topic Re: Passive Income in Retirement tax questions

Passive Income

vanwinmr — Mon, 13 Apr 2020 17:31:32 GMT

Can I offset a passive loss to the retirement distribution on 1099K? We withdrew monies from retirement acct to invest in a partnership. We are listed as limited partners.

Re: Passive Income

DavidS127 — Mon, 13 Apr 2020 18:08:06 GMT

No, a retirement account distribution reported on 1099-R is not considered income from a passive activity.

A passive activity is either (a) a trade or business in which you do not materially participate, or (b) a rental activity (unless you're a real estate professional).

See IRS Publication 525 at this link for details.

Re: Passive Income

vanwinmr — Tue, 14 Apr 2020 14:28:36 GMT

Can the initial investment to partnership be used for any other deductions?

Re: Passive Income

RobertG — Tue, 14 Apr 2020 19:26:42 GMT

The initial investment in a partnership is not deductible.

You report the gains or losses from the partnership each year.

Your initial investment is not considered until you sell or otherwise dispose of your partnership interest.

Then it is part of your basis in the partnership, and determines if you made a profit on the disposition.

Re: Passive Income

vanwinmr — Tue, 21 Apr 2020 15:23:00 GMT

Can you give me any suggestions on how to write off partnership losses for the year? My understanding is their considered a passive loss. We are considered limited partners and only have income from SS and retirement account.