Passive Equity Investment in Real Estate: First Year Write Off?

Question

If I invest $100,000 is a typical syndicated passive investment real estate deal that also funds the investment with loans (uses leverage), what is the approximate amount of my first year taxable loss?

Jeff Severson · Answer

Thanks for the replies. OK, I will ask some sponsors.

Evan Polaski · Answer

@Jeff Severson, as Natalie mentioned there is no real way of telling with this level of info.

Does the sponsor do Cost Seg?Does the sponsor use accelerated deprecation?How far into any renovations/capex projects is the project?What is the deal size, cash flow from the deal,...And 100 other pieces of info that factor into it.

As you are vetting sponsors, you can ask about historical taxable losses on other projects of theirs. No one can say with 100% certainty what that number is, before the accounting is finished.

Natalie Kolodij · Answer

This is going to be completely deal specific.

Passive Equity Investment in Real Estate: First Year Write Off?

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