AMT and passive income planning

[Centsiblelife]

We primarily make our income through syndication deals and rental properties. However, a recent K-1 form has pushed us into the realm of Alternative Minimum Tax (AMT). I'm looking into strategies like tax loss harvesting and timing our expenses, and I'm curious about what really works for reducing AMT.

 

[zen mother]

Off the palm of my hand, I think it comes down to careful planning with depreciation, credits, or even spreading gains across years but maybe run a few scenarios with a tax pro who knows real estate partnerships

 

[Pawp4w]

We primarily make our income through syndication deals and rental properties. However, a recent K-1 form has pushed us into the realm of Alternative Minimum Tax (AMT). I'm looking into strategies like tax loss harvesting and timing our expenses, and I'm curious about what really works for reducing AMT.

The timing of expenses is key when AMT looms. You have to think about whether a deduction is more valuable in a Regular Tax year or an AMT year.
if you're going to be in AMT this year, don't prepay your SALT. Those are disallowed for AMT anyway, so paying them now just helps your regular tax (which you aren't paying) and wastes the deduction in an AMT year.
Instead, push those expenses into a year where you expect to be out of AMT.

 

[dollore$]

Timing works better, bunching deductible expenses into high income years and deferring income when possible or you can look at moving passive income sources or restructuring how syndications distribute to minimize AMT specific triggers. A CPA who specializes in real estate investors is worth the money here cos AMT planning isn't straightforward