JF 4095: The 3 Types of Income Every LP Must Understand

The Best Ever CRE Show

Best Ever CRE

Business, Investing, Entrepreneurship

4.7 • 996 Ratings

🗓️ 20 November 2025

⏱️ 16 minutes

🔗️ Recording | iTunes | RSS

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Summary

Pascal Wagner breaks down how the IRS categorizes income into three buckets—active, portfolio, and passive—and why high-income earners often misunderstand how tax write-offs actually work. He explains common investor mistakes, including expecting real estate depreciation to offset W-2 or stock-market gains, and shares the simple rule that changed his entire tax strategy: “you can only offset like with like.” Pascal also walks through exceptions such as oil and gas, real estate professional status, and opportunity zones, along with how wealthy investors intentionally shift income toward passive buckets for long-term tax efficiency. This episode teaches investors to stop chasing IRRs and start choosing deals based on what problem they solve in their tax plan. Alternative Fund IV is closing soon and SMK is giving Best Ever listeners exclusive access to their Founders’ Shares, typically offered only to early investors. Visit smkcap.com/bec to learn more and download the full fund summary. Join us at Best Ever Conference 2026! Find more info at: https://www.besteverconference.com/ Join the Best Ever Community The Best Ever Community is live and growing - and we want serious commercial real estate investors like you inside. It’s free to join, but you must apply and meet the criteria. Connect with top operators, LPs, GPs, and more, get real insights, and be part of a curated network built to help you grow. Apply now at⁠ ⁠⁠⁠www.bestevercommunity.com⁠⁠ Podcast production done by⁠ ⁠Outlier Audio⁠ Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Have you ever noticed every investment pitch deck looks perfect, charts up and to the right,
0:05.0	bulletproof plans, great returns, but how do you know which projections are realistic and which
0:10.1	sponsors to trust? That's where SMK Alternative Fund 4 comes in. SMK reviewed over 350 opportunities
0:17.3	in the past six months and invested in just five high conviction deals. The fund gives
0:22.0	accredited investors access to recession-resistant real estate, industrial, multifamily, mobile home
0:28.3	parks, and private debt, with top operators. Avoid high individual deal minimums and gain
0:34.1	diversification through one allocation. SMK capital management, a family-owned firm with over 15 years of experience,
0:41.6	conducts rigorous due diligence on each investment to ensure strong performance potential
0:45.9	and capital preservation.
0:47.9	The fund targets a five-year hold with immediate cash flow, 11 to 16 percent annualized
0:52.8	returns, and tax benefits through 30 to 40% passive losses
0:57.3	in the first year. Alternative Fund 4 is closing soon. SMK is giving best ever listeners
1:02.6	exclusive access to founder's shares typically reserved for early investors. Visit smkcap.com
1:09.2	slash BEC to download the full fund summary, prior to volatile markets
1:13.9	and unpredictable returns. Your portfolio deserves a steady income stream you can count on. The
1:19.6	GSP income fund offers accredited investors 8 to 12% fixed returns from single family rentals,
1:26.2	with monthly payments starting on day one.
1:29.0	With over $30 million in assets under management, GSP's vertically integrated team handles
1:34.0	everything, acquisitions, renovations, property management, and tenants.
1:38.9	Every investment is backed by hard real estate assets across stable markets, tangible
1:43.4	cash-flowing properties you can count on.
1:45.9	You simply collect your monthly distribution. Whether you want monthly cash flow or compounding
	...

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