Hi All - I've seen quite a bit of confusion on the application of the Passive Activity  Loss Rules and Short Term Rentals.  Beyond BP, there is a lot of confusion in the accounting community as well but the same rules...

I’m new to REI but have been working in the field of addictions treatment for some time.

You qualify for installment sale treatment on the taxable gain if you go with seller financing, which is at least something. 

Pest control, this one we typically do a curtesy first treatment and then any subsequent treatment is up to the tenant whether they want to keep the service or do it themselves. 3.

Because of their background (95% of our residents are recovering heroin addicts) and payor status (50% are paid for by their treatment centers, the rest split between family or self-pay),  standard 1 year leases with monthly payments do not work.  

We see new clients with 2-3 yrs of improper treatment all the time.

Ohio also has a couple of other special rules such as the CAT tax and a funky bonus depreciation treatment.

first thing one should do is figure out if they quality the 2  in  5 tax treatment and if the home has appreciated a ton like 250 to 500k which is very common in coastal markets and Denver for instance.. selling would be far smarter than renting. pocket the tax free and find another rental. turning it into a rental you lose that one time tax treatment which in my mind is the very best for real estate. 

Does black make sense here, or would another color or treatment work better?

The specific tax treatment would depend on how the preferred equity is structured in the syndication and whether it qualifies as debt-like equity or retains characteristics of a typical equity investment.