Video: Partnership Depreciation and Loss Limitation

In this lesson, discover the intricacies of partnership depreciation options and how passive activity loss limitations (PAL) impact tax scenarios. Nick Palazzolo, CPA, illuminates the decision-making process that partnerships engage in when selecting IRS-approved depreciation methods. Moreover, the explanation delves into the mechanism by which losses from passive activities—like certain real estate ventures and limited partnership investments—can be offset, setting out the rules for carrying over surplus losses into future tax years. This insightful analysis underscores how the Tax Cuts and Jobs Act introduced the Excess Business Loss Limitation, crucial for understanding tax implications for non-corporate entities and their navigation of net operating losses.