They do not qualify as real estate professionals as I found out they are limited partners based on the 5 K-1s they received.

They are general partners in partnership XYZ that received in those 5 K-1s.

I think they don't quality to write off just any loss and believe they are limited to $25000 per year.

I wonder if that loss is affected by their income (W2 income combined $500K)....