Offset paper rental loss with K-1 income?

Offset paper rental loss with K-1 income?

Investor · Chicago, IL · Member since 2011 · 80 posts · 21 votes

I searched for this, but could not find an answer.  I have some paper losses on my rentals due to depreciation. I'm now considering an investment in the PPR note fund, which issues a K-1 at the end of the year. Would this be deemed "passive" income and thus offset by the passive rental losses?

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  • Rental Property Investor · Malvern, PA · Member since 2016 · 1k+ posts · 934 votes
    9y

    It is considered interest income and taxed as regular income.  It is passive, but not combined with rental income.

  • San Diego, CA · Member since 2012 · 19 posts · 3 votes
    9y

    Mike, you are correct, you can use passive losses from real estate to offset passive income from PPR note funds. That is exactly  what I do (under the guidance of my tax advisor). You,  obviously,  should confirm this with your tax professional as it relates to your particular circumstance....

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