"Final interpretation of the R&Rs rests with the Board"I may have made the mistake of believing that if I was in compliance with the R&R, I was in the clear. 

@Scott Pigman One of the problems of using articles, and other interpretation of facts is the "take aways" are usually screwed by the author or sources own interpretation.Having said that, when in doubt, I ask someone that is actually doing what I'm thinking about doing.  

The tax implications are subject to interpretation by the IRS come tax season.

I agree with Greg wholeheartedly but I just want to make sure you aren't interpreting what he is telling you the wrong way.

Well said.My guess would be not many of the folks who think the money should be kept in this situation have been involved in more than 25-30 landlord tenant disputes.The laws and statutes are interpreted by judges folks.

If I'm interpreting your question properly it sounds similar to what we do in Cali.

*Just my interpretation of the current laws and policies, YMMV.

The IRS interprets the first dollar you take in cash or reduced purchase (reduced debt) as a form of taking profit and you would pay tax on it until you had taken your full profit out.  

See below. 1) Properties with high equality2) Code Violations (Closed violations for lawn care/landscaping)3) Tax Delinquent (Tax Lien)4) Garage Sales (via Craigslist.com)5) Listsource.com6) Inheritance (USleadlist.com) 7) Pre-Probate8) Probate9) FIndmotivatedsellers.com (Subscription site)10) Arrest records listMy interpretation of that show is that you focus on one of these list and master them to generate leads, until you can grow and expand your business.

The calculator can measure an investment for you, but it’s up to you to interpret those measurements to see if they fit your investing strategy.