All Forum Posts by: Stephen Bass

Thank you @David M. and @Bill Brandt for your replies!  

The accumulated passive allowed losses is something that we will look into - unfortunately I don't have much faith in the CPA they've been working with but hopefully this will can be determined relatively easily.  Also need to determine what limitations (if any) apply to using these losses to offset gains.

With regard to exit strategy...the sellers are not mobile (i.e., no wish to move). They have modest cash/income needs which could be satisfied by DST-level returns but we're trying to determine if there's a better move. Satisfying the cash/income needs is a must but of course if they're able to preserve and accumulate wealth all the better.

Seems like we may just need to do some modeling...

I'm working with family that is in the wind-down/retirement phase of their real estate investment careers.  They have been actively managing a few small mulitfamily homes for many years and no longer desire to be actively managing.  These properties have been owned for many years so approx. 90% of the sales price is capital gains  - let's say four properties worth approx $1M each today.  
With 1031s - DSTs seems like a possible approach since it's truly passive however returns are low.  However given the large proportion of gains I think the tax deferral is quite valuable.
I've also read that bonus depreciation (e.g., via syndication) could achieve significant losses in the year of acquisition.  Could those losses offset the gains from the sales of the properties?  Certainly won't be completely deferred/offset as with 1031 but maybe higher returns from a syndication make this worth considering?  Are we thinking through this correctly? 
Lastly, I've also read that bonus depreciation is not recognized in the state where we live (same state as where the properties to be sold are located).  Is this relevant or is the relevant factor the location of the syndication properties that would take advantage of the bonus depreciation?

Thank you in advance - so many knowledgeable people here and I've learned so much from the forum!