Can RE professional take passive syndication losses?

Question

I classify myself as a real estate professional and understand what that means. I own rentals directly.

I invested in many syndication deals in 2019 that generated over 100k paper net losses. Can I write this off against earned income? Does the fact it is a syndication disallow me what is otherwise possible for privately held RE?

I made these investments thinking I could, and I know others that have, but my CPA is adamant that I cannot. Any insight much appreciated. It's the difference between owing 50k and getting 5k back.

Michael Plaks · Answer

@Jason Powell

Take some strong coffee (or something even stronger) and try to figure out what we argued about on this older thread and whether we agreed on anything. Warning: very technical.https://www.biggerpockets.com/forums/51/topics/647412-syndication-losses-against-active-income

Jason Powell · Answer

ok thanks @Michael Plaks fair enough. I am not a tax professional, but I've read the IRC sections of the code and that's the way I interpret it. I'm trying to evaluate the various ways that electing to aggregate could possibly come back to bite me. It's remarkably tough to process this info intelligently.

Michael Plaks · Answer

Exactly. :)  The point was: even us tax professionals who do it for a living and for many years do not have what you ask for - a simple yes/no answer.

The not-so-helpful answer seems to be (but I don't want to reopen this can of worms): maybe, in some cases, and that would require making an aggregation election. The election, by the way, is irrevocable and is not a no-brainer, it could create undesirable side effects.

Jason Powell · Answer

@Michael Plaks Thanks. I read through this thread 3 times before posting here. With humility, I admit my tax IQ isn't high enough to keep up with you all on that thread. I was honestly more confused than enlightened. I am hopefully looking for a "yes", "no", or "yes, if you...."