Key Takeaways
- Operating distributions are calculated quarterly; capital event distributions require full waterfall calculations.
- Depreciation can shelter operating distributions, creating tax-free return of capital for investors.
- K-1s report each investor's share of income, deductions, and credits for tax filing.
- Refinance distributions are tax-free up to the investor's remaining basis.
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Test Your Knowledge
1.How are syndication distributions typically structured for tax purposes?
2.What is depreciation's role in real estate syndication tax treatment?
3.What is depreciation recapture?