06/30/2026
One of the most common questions we get from passive investors is this one:
"๐๐ฐ๐ธ ๐ฅ๐ฐ๐ฆ๐ด ๐ต๐ฉ๐ฆ ๐ต๐ข๐น ๐ด๐ข๐ท๐ช๐ฏ๐จ๐ด ๐ฑ๐ข๐ณ๐ต ๐ธ๐ฐ๐ณ๐ฌ?"
Or something like that ๐
And particularly:
"๐๐ง ๐ ๐จ๐ฐ๐ต ๐ข ๐-1 ๐ต๐ฉ๐ข๐ต ๐ด๐ฉ๐ฐ๐ธ๐ด ๐ข ๐ญ๐ฐ๐ด๐ด, ๐ฅ๐ช๐ฅ ๐ ๐ญ๐ฐ๐ด๐ฆ ๐ฎ๐ฐ๐ฏ๐ฆ๐บ?"
And then of course:
"๐๐ฉ๐ข๐ต'๐ด ๐ข ๐-1 ๐ฆ๐น๐ข๐ค๐ต๐ญ๐บ?"
All great questions we love to answer! ๐
In fact, we get them so often that we finally created a simple K-1 handout for investors.
Here's the short version:
A K-1 is a tax document you typically receive each year when you invest in a syndication.
And no, just because it shows a loss doesn't necessarily mean you lost money.
How come?
Because a ๐๐ฎ๐
๐น๐ผ๐๐ and an ๐ฒ๐ฐ๐ผ๐ป๐ผ๐บ๐ถ๐ฐ ๐น๐ผ๐๐ are not always the same thing.
In real estate, depreciation can allow investors to report paper losses on their tax returns, even when a property is generating cash flow.
Of course, everyone's tax situation is different, so make sure to check with your own tax professional.
But in the meantime, if you've ever looked at a K-1 and thought:
"๐๐ฉ๐ข๐ต ๐ช๐ฏ ๐ต๐ฉ๐ฆ ๐ธ๐ฐ๐ณ๐ญ๐ฅ ๐ข๐ฎ ๐ ๐ญ๐ฐ๐ฐ๐ฌ๐ช๐ฏ๐จ ๐ข๐ต?" ๐คฃ..this handout is for you.