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Posted by Todd on June 24, 2007, 10:41 pm
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I'm looking at a K-1 (form 1065) for a passive partner of a
real estate venture. The partners capital account is
negative $35,000 at the beginning of the period. The amount
in box 2, Net Real Estate Income (Loss) is negative $15,000,
bringing ending net capital to negative $50,000. Is the
taxpayer allowed the loss on her current 1040?
Thanks in advance.
--
Todd
tpinch@bellsouth.net
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Posted by Benjamin Yazersky CPA on June 26, 2007, 12:19 am
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> I'm looking at a K-1 (form 1065) for a passive partner of a
> real estate venture. The partners capital account is
> negative $35,000 at the beginning of the period. The amount
> in box 2, Net Real Estate Income (Loss) is negative $15,000,
> bringing ending net capital to negative $50,000. Is the
> taxpayer allowed the loss on her current 1040?
Maybe.
Does the K1 have an amount on the line for nonrecourse debt?
If so, that would add to the amount of your basis for
deducting losses.
___________________________________
<<< Benjamin Yazersky, CPA [NJ & NY] >>>
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Todd on June 27, 2007, 10:54 pm
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>> I'm looking at a K-1 (form 1065) for a passive partner of a
>> real estate venture. The partners capital account is
>> negative $35,000 at the beginning of the period. The amount
>> in box 2, Net Real Estate Income (Loss) is negative $15,000,
>> bringing ending net capital to negative $50,000. Is the
>> taxpayer allowed the loss on her current 1040?
> Maybe.
>
> Does the K1 have an amount on the line for nonrecourse debt?
> If so, that would add to the amount of your basis for
> deducting losses.
Good, question, I'll ask, but I'm pretty sure sure there is
no nonrecourse debt, in which case?.....
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Seth on June 27, 2007, 10:54 pm
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>> I'm looking at a K-1 (form 1065) for a passive partner of a
>> real estate venture. The partners capital account is
>> negative $35,000 at the beginning of the period. The amount
>> in box 2, Net Real Estate Income (Loss) is negative $15,000,
>> bringing ending net capital to negative $50,000. Is the
>> taxpayer allowed the loss on her current 1040?
> Maybe.
>
> Does the K1 have an amount on the line for nonrecourse debt?
> If so, that would add to the amount of your basis for
> deducting losses.
Shouldn't that be "recourse debt"? It's the at-risk amount
that matters, and non-recourse debt isn't at risk.
Seth
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Benjamin Yazersky CPA on June 29, 2007, 6:07 pm
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>>> I'm looking at a K-1 (form 1065) for a passive partner of a
>>> real estate venture. The partners capital account is
>>> negative $35,000 at the beginning of the period. The amount
>>> in box 2, Net Real Estate Income (Loss) is negative $15,000,
>>> bringing ending net capital to negative $50,000. Is the
>>> taxpayer allowed the loss on her current 1040?
>> Maybe.
>>
>> Does the K1 have an amount on the line for nonrecourse debt?
>> If so, that would add to the amount of your basis for
>> deducting losses.
> Shouldn't that be "recourse debt"? It's the at-risk amount
> that matters, and non-recourse debt isn't at risk.
The original post mentioned that he/she was a passive
partner. So, I think to a passive (or limited) partner the
non recourse debt will increase basis for deducting losses.
___________________________________
<<< Benjamin Yazersky, CPA [NJ & NY] >>>
-----> real address on hobokeni or hobokenx <-----
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>
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