Demystifying the K-1 tax form for passive real estate investors. Learn what it is, how to read it, and how to maximize your tax benefits.

If there's one document that strikes fear into the hearts of new passive investors, it's the K-1. In this episode, CREI Collin is joined by Tax Pro Tina to demystify the K-1—the tax form you receive when you invest in a syndication.

You'll learn what a K-1 is, why you receive one, how to read the key sections, and most importantly, how to use it to maximize your tax benefits. Whether you're expecting your first K-1 or you've received several and still don't fully understand them, this episode will turn confusion into clarity.

In This Episode, You'll Learn:

• [00:00] Introduction – Why the K-1 confuses so many investors (and why it shouldn't)
• [01:30] Tina Returns – Tax Pro Tina is back to break it all down
• [02:00] What is a K-1? – Tina explains what a K-1 is and why you receive one from syndications
• [04:15] Key Sections of the K-1 – Box 1, Box 2, and other important boxes you need to understand
• [07:30] Paper Losses vs. Cash Flow – How you can receive $5,000 in cash but show a $30,000 loss on your K-1 (and why that's a good thing)
• [10:45] How to Use Your K-1 – What to do when you receive it, how passive losses work, and why tracking carryforwards is critical
• [13:00] Common Mistakes – The top three mistakes investors make with their K-1s
• [15:15] Final Advice – Tina's tips for first-time K-1 recipients
• [16:30] Recap & Action Steps – Questions to ask your CPA when you receive your K-1

Key Takeaways:

✅ A K-1 reports your share of income, deductions, and credits from a pass-through entity like a syndication

✅ Box 2 (net rental real estate income/loss) is the most important section for passive investors

✅ A "loss" on your K-1 is often a paper loss driven by depreciation—not actual money lost

✅ Passive losses can only offset passive income, but they carry forward indefinitely until you can use them

✅ Your CPA must track your passive loss carryforwards every single year—if they're not, find a Real Estate CPA who will

Resources Mentioned:

Need help building a tax-efficient passive income strategy? Schedule a free consultation with CREI Partners: https://calendly.com/shelbi-creipartners/30min

Disclaimer:

This podcast is for educational and informational purposes only and does not constitute investment, tax, or legal advice. Always consult with your CPA, attorney, and financial advisor before making any investment or tax decisions.

• (00:00:01) - Building Passive Income
• (00:01:25) - The K1
• (00:01:58) - The K1
• (00:04:28) - Passive Income and the IRS
• (00:06:07) - 3 Tax Mistakes Investors Make With Their K1
• (00:09:21) - Building Passive Income With Your K1